Each time the issue of FDI crops up, economists like to roll-out the standard comparison between India and China. It is fairly well-known that China gets about $60 billion of FDI every year; India gets barely a 10th of that (though there are now clear signs that the gap is narrowing very fast).
But look at London—a single city, though one that is undoubtedly important to the global economy. An agency that promotes inward investment said in a report released on 27 April that the city now gets $52 billion of FDI in a year, almost the same as what China gets. That is an astonishing fact.
There is also a curious bit of data in the report. The agency says that 16% of the total FDI to come into the British capital between 2003 and 2007 came from India, making it the second-largest source of FDI after the US.
Let’s assume London has got $200 billion of FDI since 2003. Is it likely that Indian companies sent $32 billion?