Feb 8, 2007

FDI inflow may double in 2007

Inflows of foreign direct investment (FDI) into India have increased significantly during the current financial year, according to the minister of commerce and industry Kamal Nath.
The inflows are likely to be more than double the amount recorded in 2006, said Mr Nath while presiding over the meeting of the parliamentary consultative committee on Tuesday

FDI equity inflows during April 2006 to November 2006 were $7.2 billion, which is the highest ever for equity capital since economic liberalisation. Mr Nath said that monthly inflows this fiscal crossed $1 billion during July, October and November 2006.

A presentation made on the occasion highlighted the fact that in the A T Kearney’s FDI confidence index India’s rank as a FDI investment destination has improved from number 15 in 2003 to number 2 in 2006. According to the leading financial firm J P Morgan, the return on equity on investments made in India is the highest in Asia at 18%. Services sector has become the top sector in attracting FDI during April-November 2006.

The committee members agreed with the minister on the importance of FDI in the country’s economy in terms of not only generating economic activities and jobs, but equally in facilitating transfer of technology and managerial capabilities, which helps enhance India’s global competitiveness.


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