Indian investments dip 54% in April-December 2009

The global financial crisis continues to exert adverse effect on Indian investments abroad. Actual foreign direct investment (FDI) by the Indian business declined by 34.1 per cent in April-December 2009 to $8.4 billion from $12.74 billion a year ago.

The investment is into wholly-owned subsidiaries and joint ventures abroad.

Of the total amount of investments, 70 per cent was in the form of equity, and most of the remaining amount comprised loans, while there was small amount under invoked guarantees, the Reserve Bank of India (RBI) said.

During nine months guarantees worth $24 million were invoked, according to RBI data.

During April-December 2008, 80 per cent of the amount of investments was in the form of equity and the remaining 20 per cent was loans, while there was no invocation of guarantee.

Thus, during April-December 2009, the share of equity has gone down in the outward investments with the amount of equity showing a decline of 41.9 per cent.