Forecast of Foreign Direct Investment of India Through ARIMA Under COVID-19 Pandemic

Ronismita Mishra () and Swapnamoyee Palit ()
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Ronismita Mishra: KIIT University
Swapnamoyee Palit: KIIT University

A chapter in Future of Work and Business in Covid-19 Era, 2022, pp 39-56 from Springer

Abstract: Abstract COVID-19 has already affected millions of lives across the globe, and most of the industries and businesses are closed. This pandemic has badly hit the process of globalization. As a result, the flows of FDI are upset and global FDI flows are anticipated to decline between 30 and 40% during 2020–2021. Countries like the USA have negotiated or held up FDI proposals for national security concerns. Regardless of the adverse transitory shocks from COVID-19, aggregate FDI inflows into India have continued resilient. FDI by technology-based enterprises has reached USD 17 billion in the first seven months of 2020, supported by new investments by Google valued at USD 10 billion in since July, 2020, and other global technology-based enterprises like Amazon, Facebook, and Foxconn have also agreed for new large investments in India by this year. The digital revolution of India is anticipated to boost the progress of the retail consumer market and e-business over the next ten years. It helps to captivate prominent international MNCs in merchandise and e-business in the Indian market. India’s apt step to armour against opportunistic economic shadowing of its companies by competing nations during the pandemic is a right move. Also, it has to tap all the existing and emerging areas which possess the potential to attract and absorb huge foreign investment for development. This paper makes a forecast of FDI using ARIMA modelling and explores the compositional and directional impact on it under this COVID scenario in India. Though the long-run forecast over the next 10 years throws a silver lining of a continuation of the upward trend of the inward FDI inflows in India, the fact that it is more skewed towards its lower limits signals the need for streamlined and substantial policy strategies to tap and promote its buoyancies to realize its trend towards the upper limit if not beyond.

Keywords: ARIMA; COVID-19; Foreign direct investment; Multi-national companies; Pandemic (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-981-19-0357-1_5

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DOI: 10.1007/978-981-19-0357-1_5

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