Foreign Direct investment in India

FDI Inflows (2007-08)

Of the total FDI amounting to $ 56450 million in first 11 months of fiscal 2007-08, direct investment stood at $ 25455 million. of this, equity investment accounts for the major share with $ 20636 million. Portfolio investments totaled $ 30995 million.

India: Foreign Investment Inflows (Fiscal 2007-08) (In US$ Million)
SEGMENT	MONTH
SEGMENT	Apr.	May	June	July	Aug.	Sept.	Oct.	Nov.	Dec.	Jan.	Feb.	Apr. to Feb
A. Direct Investment (I+II+III)	1643	2120	1238	705	831	713	2027	1864	1558	1767	5670	25455
1. Equity (a+b+c+d+e)	1643	2120	1238	705	831	713	2027	1864	1558	1767	5670	20636
a. Govt. (SIA/FIPB)	76	847	177	177	76	117	95	82	127	221	259	2254
b. RBI	699	1050	912	515	512	201	1710	965	1385	884	4704	13537
c. NRI	-	-	-	-	-	-	-	-	-	-	-	-
d. Acquisition of shares.	868	223	149	13	243	395	222	817	46	662	707	4345
e. Equity capital of unincorporated bodies#	-	-	-	-	-	-	-	-	-	-	-	500
Reinvested earnings+	-	-	-	-	-	-	-	-	-	-	-	4476
Other capital ++	-	-	-	-	-	-	-	-	-	-	-	343
B. Portfolio Investment (a+b+c)	1974	1852	3664	6713	-2875	7081	9564	-107	5294	6739	-8904	30995
a. GDRs/ADRs##	11	5	300	2028	448	1	2731	158	2708	249	87	8726
b. FIIs**	1963	1847	3279	4685	-3323	7057	6833	-265	2396	6490	-8991	21971
c. Offshore funds & others	-	-	85	-	-	23	-	-	190	-	-	298
Total (A+B)	3617	3972	4902	7418	-2044	7794	11591	1757	6852	8506	-3234	56450
* : Relates to acquisition of shares of Indian companies by non-residents under Section 6 of FEMA, 1999. Data on such acquisitions have been included as part of FDI since January 1996. : Represents inflow of funds (net) by Foreign Institutional Investors (FIIs). # : Figures for equity capital of unincorporated bodies for 2006-07 and 2007-08 (April-December) are estimates. # # : Represents the amount raised by Indian Corporates through Global Depository Receipts (GDRs) and American Depository Receipts (ADRs). + : Data for 2006-07 and 2007-08 are estimated as average of previous two years. ++: Data pertain to inter company debt transactions of FDI entities. ‡ : Include swap of shares of US $ 3.1 billion. Notes** : 1. Data on FDI have been revised since 2000-01 with expanded coverage to approach international best practices. 2. These data, therefore, are not comparable with FDI data for previous years. Also see ‘Notes on Tables ‘of Table No 42&43. 3. Monthly data on components of FDI as per expanded coverage are not available.
SOURCE: Reserve Bank of India

In recent times transational corporations from many developing and transition ecionomies have become very important investors in developed as well as less developeed countries either through M&A route or through greenfield investments. According to a reserve Bank of India report, TNCs from economies like China, Brazil, India, Russia and South Africa have emerged as global leaders in manufacturing and services sectors. The UNCTAD's World Investment Report 2007 revealed that global outward FDI amopunted to $ 1216 billion in 2006 registering significant growth in last 17 years from $ 230 billion in 1990.

OUTWARD FOREIGN DIRECT INVESTMENT: WORLD & DEVELOPING COUNTRIES (In US$ Billion*)
	2004	2005	2006
A. World outward FDI flows	877	837	1216
Outward FDI flows from developing economies.	117	116	174
Of which
South Africa	1.4	0.9	6.7
Brazil	9.8	2.5	28.2
China	5.5	12.3	16.1
Korea	4.7	4.3	7.1
India	2.2	2.5	9.7
Singapore	8.1	5.0	8.6
Russian Federation	13.8	12.8	18.0
B. World outward FDI stock	10325	10579	12474
C. Income on outward direct investment	607	845	972
D. Cross border M&As	381	716	880
E. Total asset of foreign affiliates	42807	42637	51187
F. Exports of foreign affiliates	3733	4197	4707
G. Employment of foreign affiliates ('000)	59458	63770	72627
* Value at current prices
SOURCE: UNCTAD, World Investment Reports (2006 & 2007)

India: Foreign Investment Inflows (Fiscal 2007-08) (In US$ Million)
SEGMENT	YEAR
SEGMENT	1995-96	1996-97	1997-98	1998-99	1999-2000	2000-01	2001-02	2002-03	2003-04	2004-05	2005-06	2006-07
A. Direct Investment (I+II+III)	2144	2821	3557	2462	2155	4029	6130	5035	4322	6051	8961	22079
1. Equity (a+b+c+d+e)	2144	2821	3557	2462	2155	2400	4095	2764	2229	3778	5975	16482
a. Govt. (SIA/FIPB)	1249	1922	2754	1821	1410	1456	2221	919	928	1062	1126	2156
b. RBI	169	135	202	179	171	454	767	739	534	1258	2233	7151
c. NRI	715	639	241	62	84	67	35	-	-	-	-	-
d. Acquisition of shares.	11	125	360	400	490	362	881	916	735	930	2181	6278‡
e. Equity capital of unincorporated bodies#	-	-	-	-	-	61	191	190	32	528	435	897
Reinvested earnings+	-	-	-	-	-	1350	1645	1833	1460	1904	2760	5091
Other capital ++	-	-	-	-	-	279	390	438	633	369	226	506
B. Portfolio Investment (a+b+c)	2748	3312	1828	-61	3026	2760	2021	979	11377	9315	12492	7003
a. GDRs/ADRs##	683	1366	645	270	768	831	477	600	459	613	2552	3776
b. FIIs**	2009	1926	979	-390	2135	1847	1505	377	10918	8686	9926	3225
c. Offshore funds & others	56	20	204	59	123	82	39	2	-	16	14	2
Total (A+B)	4892	6133	5385	2401	5181	6789	8151	6014	15699	15366	21453	29082
* : Relates to acquisition of shares of Indian companies by non-residents under Section 6 of FEMA, 1999. Data on such acquisitions have been included as part of FDI since January 1996. : Represents inflow of funds (net) by Foreign Institutional Investors (FIIs). # : Figures for equity capital of unincorporated bodies for 2006-07 and 2007-08 (April-December) are estimates. # # : Represents the amount raised by Indian Corporates through Global Depository Receipts (GDRs) and American Depository Receipts (ADRs). + : Data for 2006-07 and 2007-08 are estimated as average of previous two years. ++: Data pertain to inter company debt transactions of FDI entities. ‡ : Include swap of shares of US $ 3.1 billion. Notes** : 1. Data on FDI have been revised since 2000-01 with expanded coverage to approach international best practices. 2. These data, therefore, are not comparable with FDI data for previous years. Also see ‘Notes on Tables ‘of Table No 42&43. 3. Monthly data on components of FDI as per expanded coverage are not available.
SOURCE: Reserve Bank of India

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June 2008