India key to US$1.5 trillion intra-Commonwealth trade, investment
India’s key position in driving intra-Commonwealth trade and investment to over US$1.5 trillion by 2020 has been flagged by a new report ahead of the April 16-20 meeting of heads of government to be attended by Prime Minister Narendra Modi, among others.
Published by the Commonwealth Secretariat, the report titled ‘Strengthening the Commonwealth Advantage: Trade, Technology, Governance’ says intra-Commonwealth investment has seen a “dramatic rise” driven by India in recent years.
Between 2005 and 2016, it says India was the top recipient of greenfield FDI (when a parent company established its operations in a foreign country from the ground up) not only from the Commonwealth but also from the world, more than doubling the amount it received over 10 years.
In 2015, India overtook China for the first time as the biggest destination for greenfield FDI, it says.
India has moved into the top five providers of intra-Commonwealth services trade, surpassing Canada, along with Australia, Singapore and the UK. The Commonwealth, the report says, has also been the net recipient of global FDI flows.
“Commonwealth member countries held about one-fifth of global FDI stock in 2016…10 members received more than 90 per cent of inflows between 2010 and 2016. The top five recipients were the UK, Singapore, Canada, Australia and India, in that order”, it says.
“Commonwealth Asian members – Bangladesh, Brunei Darussalam, India, Malaysia, Pakistan, Singapore and Sri Lanka – accounted for 41.1 per cent of the combined total Commonwealth exports of goods and services in 2016”.
“This represents a significant increase from 31.4 per cent in 2005. India, Singapore and Malaysia are the dominant contributors, accounting for 38 per cent of total Commonwealth exports and 93 per cent of Commonwealth Asian exports”, the report adds.
On greenfield investment, the report says that in 2017, cumulative intra-Commonwealth greenfield foreign direct investment was estimated at $700 billion, creating 1.4 million jobs through 10,000 projects.
The secretariat projects intra-Commonwealth greenfield investment could reach $870 billion by 2020, the report, to be officially launched on April 11, says.
“This is a remarkable indication of the power of Commonwealth connection and of the benefits that accrue to member countries as a result of Commonwealth Advantage, particularly with world trade only now emerging from the unprecedented slowdown triggered by the financial crisis a decade ago,” said Commonwealth Secretary-General Patricia Scotland.
She added: “With rising protectionist sentiments and a backlash against globalisation in many countries, the role of the Commonwealth becomes increasingly important as a positive influence for strengthening trade links across boundaries and building prosperity in which all can share.”