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Buoyed by favourable policies, India has emerged as the fourth largest destination in Asia for foreign direct investment, attracting over Rs 20,000 crore (Rs 200 billion) within the first six months of the current fiscal year.
Overtaking South Korea, but still behind neighbouring China, India attracted a cumulative FDI inflow of Rs 1,81,566 crore (Rs 1,815.66 billion) since August 1991 up to September 2006, the Economic Survey said.
During the April-September 2006, total FDI inflows (excluding reinvested earnings and other capital components) were Rs 20,155 crore (Rs 201.55 bilion), the pre-Budget Economic Survey tabled in Parliament on Tuesday said.
As per the latest report of UNCTAD, India surpassed South Korea to become the fourth largest recepient of FDI in the region, the Survey said.
In terms of regional FDIs received, Delhi and the National capital region of UP and Haryana together pocketed $6053.2 million worth of foreign investments, accounting for 24 per cent of total FDI inflows till September 2006, it said.
Maharashtra, Dadra and Nagar Haveli, Daman and Diu followed in second place with $5,399.1 million (21.52 per cent) and Karanataka in third spot at $1,727.5 million (6.85 per cent).
Tamil Nadu and Pondicherry together accounted for $1,630.67 million (6.5 per cent), while Andhra Pradesh overtook Gujarat to occupy the fifth place with $970.6 million (3.87 per cent), it said.
According to the Survey, for the cumulative period August 1991-September 2006, electrical equipment, including computer software and electronics, topped the list of sectors attracting FDI at $6,272 million.
This was followed by services sector (financial and non-financial) at $4,600 million, while telecom comprising radio paging, cellular mobile and basic telephony services was third with $3,776 million.
The Survey said transportation industry received $3,436 million to be at fourth spot with fuels (power and oil refinery) which witnessed FDI worth $2,720 million in fifth place.
Chemicals (other than fertilisers) ($2,238 million) and food processing industries ($1,212 million) were in the sixth and seventh places respectively, it said.
The much-hyped drugs and pharmaceutical sector occupied a lowly eighth position in terms of FDI receipts at $1,055 million during the period, followed by metallurgical industries and cement and gypsum products with $766 million, the Survey said.
With increased liberalisation, equity caps existed only in limited sectors such as FM radio broadcasting, insurance, defence production print and electronic media covering news amongst others, the Survey said.
FII turns positive: Foreign institutional investment has turned positive in the second half of the current year after turning into net outflows during the first half of 2006-07. The net FII inflow during April September 2006 was $1.6 billion as against $5.4 billion in April September, 2005.
As regards external commercial borrowings, the survey informs of a sharp increase in net inflows to $5.1 billion in first half of 2006-07 from a total inflow of $2.7 billion in 2005-06. It emphasizes that with the acceleration of growth of the manufacturing sector, improvement in India's credit rating and the current interest and exchange rate outlook, ECBs continued to remain attractive.
The foreign exchange reserves reached $180 billion as on February, 2007 with active purchase of foreign exchange by RBI of $9.8 billion in the first nine months of the current fiscal. The foreign exchange reserves provide an import cover of about 11 months.
The reserve accretion has been aided by the balance of payments of $8.6 billion in the first six months of 2006-07 as against $15.1 billion in the year of 2005-06. In addition, sustained appreciation of other major currencies viz-a-viz the dollar in the current year also resulted in valuation gain.
Economic Survey 2006-07: Complete Coverage
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