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Shri Kamal Nath, Union Minister of Commerce & Industry, has said that the improved investment climate has resulted in unprecedented inflows of FDI against projects which had been approved earlier, but which had not resulted in actual inflows. The FDI inflows have posted an impressive growth during the first six months of 2004-05. FDI inflows amounting to US$ 2.38 billion were received during April-September 2004 as against US$ 1.41 billion received in the corresponding period of the previous financial year, registering a growth of 68%. This covers only the equity component. Other FDI components such as reinvested earnings and other capital would be included at the end of the financial year. After incorporating these components into FDI statistics, it is expected that the inflows would further go up by around 65% to 70%, Shri Kamal Nath said while addressing a news conference here today.
Even fresh FDI approvals have picked up during the first six months of 2004-05. 835 approvals were granted involving US$1.38 billion, showing a growth of 94% over the corresponding period last year, the Minister said.
With the opening of the Indian economy in 1991, the FDI policy has been progressively liberalised. Most sectors and activities have been placed under the automatic route. "The policy is under constant review and the goal is full automacity. The Government has recently allowed transfer of shares and convertible debentures from resident shareholders to foreign investors on the automatic route except in the financial sector and in cases attracting the SEBI Takeover Code", Shri Kamal Nath said.
India has been attracting attention of the global investing community in view of its liberal and investor friendly regime and competitive strengths. Besides the known prowess of India in the field of information technology, the automobile, telecommunication, electronic and electrical equipments pharmaceuticals, financial sectors are some of the major sectors attracting global investors.
In the FDI Confidence Survey, 2004, A. T. KEARNEY has rated India as the 3rd most attractive investment destination (behind China and USA) compared with 15th position two years ago and 6th last year.
A. T. KEARNEY has also ranked India as the best BPO destination.
According to UNCTAD & Corporate Location, India is amongst the top 3 investment ‘hot spots’ for the next 4 years.
The latest World Economic Forum’s ‘Global Competitiveness Report ranks India at 41st place out of 102 countries in terms of restrictions on foreign ownership. In comparison, Malaysia is ranked 65th, Thailand 72nd and China 81st. Interestingly, none of the major developing economies is ranked higher than India.
During April-September 2004:
Mauritius, USA, Netherlands, Germany and Japan are the top five investing countries into India during this period.
The top five sectors receiving FDI are electrical equipment, drugs & pharmaceuticals, consultancy services, fuels and metallurgical industries.
Delhi, Maharashtra, Karnataka, Andhra Pradesh and Gujarat are the major recipient states of FDI.
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