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April 20, 2007 12:12 IST
Foreign direct investment to India is zooming. FDI inflows to the country during 2006-07 surged to a record $16 billion, according to the annual supplement of the Foreign Trade Policy unveiled on Thursday.
Announcing a record high of FDI (equity) inflows in India, Kamal Nath, Minister of Commerce and Industry, said that there has been a robust growth in foreign direct investment to India.
"A liberal trade policy has a direct effect on FDI flows and the two are closely inter-related. The year 2006-07 has seen our FDI equity inflow go up to almost $16 billion from $ 5.5 billion in the previous year � almost tripling of the inflows in one year," he said.
The minister said the last three years of the Manmohan Singh government has seen a staggering 725 per cent increase in FDI inflows � up from $2.22 billion in 2003-04 to $16 billion in 2006-07.
"In line with the international practice of including the retained earnings reinvested, our FDI touches $19 billion in 2006-07, constituting 2.3 per cent of our GDP," he said.
Nath said this is about 6.8 per cent of the gross capital formation or gross investment in the economy.
"I am sure that this is quantum jump compared to only 0.5 per cent of GDP and about 1.5 per cent of gross investment three years ago. The directional flow of FDI into manufacturing and export of goods and services is contributing immensely to our export efforts," the Minister added.
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