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FDI inflows in India outpace rest of the world: V Govindarajan

A Correspondent in New Delhi

India has seen an upward swing in FDI inflows at a time when the world economy was facing a downward trend.

This was stated by V Govindrajan, secretary, department of industrial policy and promotion, at the India Economic Summit 2002, jointly organised by the Confederation of Indian Industry and the World Economic Forum, in New Delhi on Tuesday.

Govindarajan was speaking at a session, 'Dialogue on the exports and the foreign direct investment scenarios.'

FDI inflow into India outpaced inflows in rest of the world, with FDI into the country in first quarter of 2002-03, growing by more than 60 per cent as compared to last year, while the FDI in rest of the world grew by 55 per cent, he said.

According to Govindarajan, streamlined procedures would automatically lead to reduction in transaction cost and benefit investments. India's ability to attract greater FDI would depend on competitiveness of Indian industry, both in the domestic market and in the international market.

He agreed with the other panelists that it was the perception regarding India that needed to be changed. India needs to market itself better internationally in order to attract greater investments, he said.

L Mansingh, director-general, Directorate General of Foreign Trade, stated that enough had been said about the negatives and instead went on to highlight the positives in the economy, especially in the exports.

He informed the participants that from 0.67 per cent share of world trade, India's share would rise to 1 per cent of the world trade by of 2007. To achieve this target, exports will have to increase from the present level of $42 billion to $80 billion by 2007. In dollar terms, it would mean a growth of 12 per cent per year, he said.

Mansingh said that the composition of trade had changed, and transaction costs had gone down as shown by an EXIM bank report on cost in different export sectors. Speaking about the changes in the government systems, Mansingh stated that 70 per cent of all applications for exports were received online by the DGFT and in most cases approvals were given the same day.

He further said that soon online approvals would be available to the foreign trading community. On infrastructure development, Mansingh mentioned that, DGFT will soon come up with a programme wherein 80 per cent of the funds available from exports would be made available to the states for infrastructure development.

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