PRIME MINISTER’S OFFICE

MINISTRY OF FINANCE

RESERVE BANK OF INDIA

SECURITIES & EXCHANGE BOARD OF INDIA

MINISTRY OF COMMERCE AND INDUSTRY

MINISTRY OF EXTERNAL AFFAIRS

MINISTRY OF DEFENCE

MINISTRY OF HEAVY INDUSTRIES

DEPARTMENT OF INDUSTRIAL POLICY & PROMOTION 

MINISTRY OF INFORMATION TECHNOLOGY

DEPARTMENT OF TELECOMMUNICATION

NATIONAL HIGHWAYS AUTHORITY OF INDIA

MINISTRY OF SHIPPING

MINISTRY OF CIVIL AVIATION

AIRPORTS AUTHORITY OF INDIA

MINISTRY OF RAILWAYS

MINISTRY OF PETROLEUM

MINISTRY OF CHEMICALS

MINISTRY OF POWER

INDIA ranks second in the world in terms of financial attractiveness, people and skills availability and business environment. This is revealed in AT Kearney's 2007 Global Services Location Index. Country's financial stability in the current environment of financial turbulence and a possible unwinding  of macro imbalances sends clear message to the prospective foreign investors about India's position as an expanding investment destination. "India's external sector has displayed considerable strength and resilience since the reforms in 1991- despite several domestic as well as global political events and supply shocks in food and fuel........we partner with the global economy fully on the trade and current account while there is progressive liberalisation of the capital account, consistent with the progress in reforms in the real, fiscal and financial sectors",  observed Dr Y.V.Reddy, Governor of India's central banking authorities, Reserve Bank of India (RBI) at the World Leaders Forum in New York in April this year. "The strong macro economic fundamentals, growing size of the economy and improving investment climate has attracted global corporation to invest in India. A major outcome of the economic reforms process aimed at opening up the economy and embracing globalization has led to to tremendous  increase in Foreign Direct Investment inflows into India", says country's powerful industry lobby CII.

 

CUMULATIVE FDI EQUITY INFLOWS
	In Rs Crore	In US$ Million
Cumulative amount of FDI inflows (From April 2000 to March 2009)	3,93,020	89,819
Amount of FDI inflows during 2008-9 (From April 2008  to January 2009)	105,673	23, 885
Cumulative amount of FDI Inflows (Up to April 2009)	4,04,728	92,158
SOURCE: DIPP,  Federal Ministry of Commerce & Industry, Government of India

Branding India as a "safe and stable" investment destination amid global financial turmoil, country's Commerce and Industry minister Kamal Nath expects despite the global financial meltdown, FDI inflows into India during the current fiscal year (2008-09) will close at $ 35 billion signifying over $ 11 billion invested in the previous financial year (India's fiscal year is April to March). In 2007-08, reinvested earnings of foreign firms in India stood at $ 5.5 billion. Global firms have routed most of the investment through tax havens like Mauritius and Singapore during 2007-08, while Japanese firms have poured more money into India. Lot of investment is expected to flow into petroleum, manufacturing and electronic hardware sectors, Nath said.

Year Wise FDI inflows into Infrastructure sector during April 2000 to December 2007 (In US$ million)
YEAR	AMOUNT
2000-01	292.37
2001-02	1902.26
2002-03	347.33
2003-04	388.37
2004-05	456.00
2005-06	914.04
2006-07	2179.39
2007-08 (Up to December 2007)	4095.80
TOTAL	10575.56
SOURCE: Federal Ministry of Commerce and Industry, Government of India

Policymakers estimate that to sustain high growth rate India will need massive investment in the five year period to March 2012, including $500 billion in infrastructure, to sustain high growth rates. In January, India raised FDI limits in petroleum refinery, aviation, commodity exchanges, credit information companies and mining of some precious metals to attract more capital and boost growth in those sectors. The Congress(I)-led UPA government has plan to raise FDI limits in insurance to 49 cent. in fact the Cabinet has okayed it, now it will go to Parliament. However, the retail trade is yet to be opened further. The government is in the process of fine tuning FDI rules in order to make India more attractive as FDI destination.

In FDI equity investments Mauritius tops the list of first ten investing countries followed by US, UK, Singapore, Netherlands, Japan, Germany, France, Cyprus and Switzerland.  Between April 2000 and July 2008 FDI inflows from Mauritius stood at $ 30.18 billion followed by $5.80 billion from Singapore; $ 5.47 billion from the US; $ 4.83 billion from the UK; $ 3.12 billion from the Netherlands; $ 2.26 billion from Japan; $1.83 billion from Germany; $ 1.41 billion from Cyprus; and $1.02 billion from France.

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November2008