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| FDI inflows not likely to stagnate: govt official |
| Press Trust of India / Kolkata Aug 14, 2009, 19:32 IST |
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Despite the global economic meltdown, the country's foreign direct investment (FDI) inflows, which touched about $7 billion in the first quarter this fiscal, is unlikely to stagnate, a top government official said today.
Joint secretary of the Department of Industrial Policy & Promotion under the Commerce Ministry Gopal Krishna said in the first quarter of the current financial year FDI inflows to India were around $7 billion.
Krishna said because of the unstable economic scenario prevailing in the world which had led to surfacing of some sort of protectionism, it was not possible to fix a target for FDI inflow during the current fiscal.
"However, he said that although global cross-border investment flows were expected to shrink, India is not likely to suffer from lower inflows," he said at an interactive session organised by Indian Chamber of Commerce here.
While actual investment flows during 2008-09 would be about $37.50 billion, that in the current financial year is likely to be between $35 billion and $40 billion.
In 2007-08, FDI inflows, inclusive of re-invested earnings, was $34.36 billion.
Regarding India's share in total global FDI flows, Krishna said it was 1.25 per cent to 1.5 per cent at present. "It is likely to be in the region 1.75 per cent to 2 per cent in the current fiscal."
More than 40 per cent of India's FDI inflows was routed through Mauritius, followed by Singapore, he said.
About FDI cap in the defence sector, Krishna said currently it was 26 per cent.
With the growing needs of procuring sophisticated defence equipment over the years to come, there could be re-think on this in future, he said.
However, he maintained that there was no move on the part of the government to review FDI cap in defence at the moment and there was also no proposal. "It is a very sensitive issue," he said.
Of late, the IT and tourism sectors were attracting FDI inflows in the country, he said. Earlier, it used to be manufacturing.
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