India is set to attract foreign direct investment of $40 billion in fiscal 2008-09 with overseas investors betting big on the manufacturing sector in the world's second fastest growing economy.
The country received $20 billion foreign direct investment between January and June in the calendar 2008 and $10 billion in the first quarter of the current fiscal.
"Going by this, achieving $40 billion in 2008-09 does not seem unrealistic," secretary in the Department of Industrial Policy and Promotion Ajay Shankar said at a FICCI function in New Delhi. The target for the fiscal is set at $35 billion. The inflows in 2007-08 were $25 billion.
Shankar said, though seeing slight moderation in production growth, India has emerged among the preferred destinations for the overseas investors. Automobiles and construction equipment segments are attracting increased interest among investors.
The DIPP Secretary expressed hope that the growth outlook in the manufacturing sector would be "more positive" in the next few months.
"There was a slight moderation but the industry has undertaken cost-cutting and other productive measures," he said.
The Index for Industrial Production growth had dropped to 5.4 per cent in June this fiscal from 8.9 per cent a year ago. For the April-June period as well, the IIP rose by 5.2 per cent against 10.3 per cent in the same period last year.
Within IIP, manufacturing expanded by 5.9 per cent in June against 9.7 per cent in the same month last year. For the first quarter, the segment grew by 5.6 per cent, compared to 11.1 per cent in the corresponding period in 2007-08.
Though the growth outlook for 2008-09 has been lowered to sub-eight per cent by different agencies, India remains among the fastest expanding economies.
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