Foreign Direct Investment in South Asia

Publication | February 2008

This issue of the South Asia Economic Report (SAER) is the third in a series of reports on economic and development issues in South Asia. It is a cooperative effort of the South Asia Department and the Central and West Asia Department of the Asian Development Bank (ADB). The SAER aims to provide information to policy makers, academics, and ADB management and staff. It highlights issues that help promote debate and foster appropriate policies and greater cooperation and integration in the region. The themes of the first and second issues of the SAER were, respectively, 'Banking, Governance, and the Investment Climate,' and 'Social Sectors in Transition: Accelerating Inclusive Growth and Human Development.' This issue's theme is 'Foreign Direct Investment in South Asia.'

The key messages of this third SAER are recapitulated below :

  • South Asia continues on a high growth track.
  • Foreign direct investment (FDI) is one of the key elements required for sustainable economic growth in the region.
  • The region has made efforts to liberalize its policies, and FDI inflows into the region have been increasing.
  • The absolute amount of FDI, however, is still low compared to other developing regions and countries of Asia.
  • The region's main obstacle in attracting FDI is its poor business climate.
  • South Asia has great opportunities for increasing FDI, and foreign investors' perception of the region is becoming progressively more positive.
  • Macroeconomic and political stability, appropriate policy and regulatory frameworks, infrastructure development, accelerated development of small and medium-sized enterprises, improvement in the quality of local workers, and enhancement of regional cooperation are all needed for further promotion of FDI in South Asia.


  • Foreword, Abbreviation and Acronyms, Explanatory Notes
    • Introduction
    • Foreign Direct Investment in South Asia
    • Country Section
  • References
  • Statistical Appedix

Additional Details

  • Economics
  • Bangladesh
  • Bhutan
  • India
  • Maldives
  • Nepal
  • Sri Lanka
  • BBK091808
  • 1995-560X (Print)

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