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India's Jan-May FDI inflow up 60%

India's foreign direct investment in the first five months of 2002 surged 60 per cent over the year-ago period to $1.89 billion, a government statement said on Wednesday.

The increase in FDI came despite analysts' fears that a military standoff between India and Pakistan as well as religious violence in Gujarat, India's second-most industrialised state, could hit foreign investment.

Foreign investment inflows in May rose 87 per cent over the year-ago period to $501 million, the statement said. The amount did not include American and global depositary receipts.

Some years ago, the government set an annual target of attracting $10 billion in foreign direct investment, but has managed only about $3.0 billion each year. In comparison, China has attracted $30-40 billion in FDI annually for several years.

Tensions between nuclear rivals India and Pakistan have eased following intense international efforts but the neighbours still have a million men massed along their border.

Apart from the border standoff, nearly 1,000 people were killed in the country's worst religious bloodletting in a decade after 59 people were burnt alive in a train in late February.

But the government has said the violence will not hit foreign investments and has asked investors not to overlook India's strong economic fundamentals.

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