FDI may increase to $36 bn in 2013-14

The Prime Minister's Economic Advisory panel expects foreign direct investment in India to increase to $36 billion this fiscal on the back of supportive policies.

"For 2013-14, we are projecting that with supportive policies it is possible to generate higher levels of inbound foreign direct investment flows of the order of $36 billion, comparable to four of the previous six years," the Prime Minister's Economic Advisory Council report said.

The outbound FDI is also expected to increase, resulting in net FDI inflow of $24 billion, it said.

From 2007-08 to 2009-10, the annual foreign inflows ranged from $33-35 billion, while outbound FDI was $14-19 billion.

During the first nine months of the 2012-13 fiscal, India received foreign inflows worth $21 billion, lower than the $29 billion in the corresponding period of 2011-12.

The outbound FDI was marginally smaller and the net inflow of $15 billion in the first nine months of 2012-13 was significantly smaller than the $21

billion in the same period of the previous year.

PMEAC has estimated that for the entire 2012-13, FDI into the country may reach at $26 billion, while outbound FDI may touch $8 billion.

On portfolio investment, it said that in 2012-13, inflows were weak in the first quarter, but picked up in the second and third quarters, totalling more than $16 billion in the first nine months.

For the year as whole, portfolio inflows are estimated to be close to $24 billion, it added.

"In 2013-14, we projected a level of inflow somewhat lower than that of the previous year.

"Maintaining this level will be mostly dependant on domestic policy stance and growth conditions.

"Abrupt weakening of international risk appetite can pose a problem, but at the moment crisis conditions are not expected," it said.