As per the data up to November, 2020, released by the Union Finance Ministry, which one of the following countries ranks 1 in terms of ODI (Outward Direct Investment) for the year 2020–21?
- (a)USA
- (b)Singapore
- (c)Mauritius
- (d)United Kingdom
Correct — B, Singapore. Outward (or Overseas) Direct Investment is investment made by Indian companies in businesses abroad, through equity, loans and guarantees. On the Union Finance Ministry's data up to November 2020, Singapore was the single largest destination of India's ODI in 2020-21, ahead of the United States and Mauritius. Singapore's low-tax regime, ease of doing business and role as a financial gateway to Asia make it the leading route for Indian overseas investment.
- (a)USA — The USA is a major destination for Indian ODI and often near the top, but it was not ranked first on the November-2020 data for 2020-21 — Singapore led.
- (c)Mauritius — Mauritius has historically been a leading route (largely for tax-treaty reasons) but had slipped behind Singapore by this period.
- (d)United Kingdom — The UK is a significant destination but stood well below Singapore, the USA and Mauritius in India's ODI figures.
Outward Direct Investment (ODI) is direct investment by Indian residents in joint ventures and wholly-owned subsidiaries abroad, routed and reported through the RBI under FEMA. It is the mirror image of FDI (foreign investment coming into India). Singapore, Mauritius, the USA, the Netherlands and the UAE are consistently among India's top ODI destinations, though the year-to-year ranking shifts with large individual deals.
This is a data-based current-affairs item, anchored to the April 2021 exam: on the Finance Ministry's late-2020 figures Singapore had overtaken Mauritius and the USA as India's top ODI destination.
- ODI = Indian firms' direct investment abroad (equity + loans + guarantees), reported to the RBI.
- Singapore was India's top ODI destination for 2020-21 on data up to November 2020.
- Singapore, Mauritius, the USA, the Netherlands and the UAE are the usual top destinations.
- ODI (outward) is distinct from FDI (inward investment into India).
Singapore ranked first on the Finance Ministry's data to November 2020 — option (b).
- Confusing ODI (outward, by Indian firms) with FDI (inward, into India).
- Assuming Mauritius or the USA tops the list — Singapore led on this data.
Asked as 'top source/destination country for India's FDI/ODI in year X', usually as a data-based current-affairs item.
In the last one decade, which one among the following sectors has attracted the highest Foreign Direct Investment inflows into India?
- (a) Chemicals other than fertilizers
- (b) Services sector
- (c) Food processing
- (d) Telecommunication
Answer(d) Telecommunication
Same broad theme — India's direct-investment flows and their leading recipients. This UPSC item asks which sector drew the highest FDI (inward) inflows, the mirror of the outward ODI destination tested here.
- practice — not a real PYQ
'Outward Direct Investment (ODI)' by India refers to
- (a)foreign companies investing in India
- (b)Indian companies investing in businesses abroad
- (c)remittances sent home by NRIs
- (d)portfolio inflows into Indian stock markets
Answer(b) Indian companies investing in businesses abroad — the outward counterpart of FDI.
- practice — not a real PYQ
Which of the following has consistently been among the top destinations of India's outward direct investment?
- (a)Singapore
- (b)Japan
- (c)Brazil
- (d)South Korea
Answer(a) Singapore — a leading destination for Indian overseas investment.