Despite the ongoing economic crisis shrinking cross-border capital movements, India hopes to attract $30 billion worth of Foreign Direct Investment (FDI) in the current fiscal, according to a senior industry ministry official.
At this level, FDI inflows this fiscal will be marginally higher than the preliminary estimates of $27.5 billion for 2008-09. The government had fixed an FDI target of $30 billion for 2008-09.
“The investments may be delayed but the investor outlook remains optimistic,” said Gopal Krishna, joint secretary, Department of Industrial Policy and Promotion (DIPP), on the sidelines of a function organised by global consulting firm Booz & Company and the American Chamber of Commerce (AMCHAM).
If foreign firms reinvesting their profits in India are also taken into account, the total FDI inflow will touch the $40 billion mark in the current fiscal, the same level expected in the just ended financial year.
Though the ministry is optimistic of attracting more foreign investments in the current fiscal, the latest FDI numbers showed a sharp decline. FDI inflow is expected to decline to about $2.5 billion in March, compared with $4.4 billion in the year-ago period.
Commenting on the new press notes on FDI, he said it was an effort to simplify the complex foreign investment procedures, adding that investment through the automatic route had increased to 90 per cent in the last fiscal as against just 16 per cent in 2000.
The resilience of the Indian economy makes it a favourable destination for private equity by foreign investors, even as the financial crisis is leading to a global slowdown, said Atul Singh, president (India and South West Asia), Coca-Cola.