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The country's outward foreign direct investments rose by 29.6 per cent to $17.4 billion in 2007-08, backed by India's Inc large-scale acquisitions, growing appetite for an overseas presence and the hunt for energy assets. The outward FDI in 2006-07 was $13.45 billion.

It is not just sending out funds-kind-of-situation where there is long wait for returns. The inflows, in the form of dividend, royalty, repayment of loans and licence fees, from outward FDI rose by 76.7 per cent to $916 million in 2007-08 as against $518 million a year ago, according to Reserve Bank of India [Get Quote] data.

Outward investment refers to investment by Indian entities and partnership firms in joint ventures and wholly-owned subsidiaries abroad, besides remittances for production sharing agreements for oil exploration. The data does not include investments by individuals and banks.

Of the total investments in 2007-08, 81.6 per cent were in the form of equity and loans accounted for the remaining 18.4 per cent. During the same period, about 95 per cent outward FDI proposals were for investments exceeding $5 million.

Reviewing the trends in overseas investments by Indian business in its July bulletin, the RBI said, "Outward FDI witnessed a substantial pick-up from 2006-07 onwards, facilitated largely by progressive liberalisation of overseas investment policies".

The manufacturing sector led the investments, with a 43 per cent share, followed by the non-financial services (11 per cent) and trading (4 per cent). The manufacturing sector saw proposals in electronic equipment, fertilisers, agricultural and allied products and gems and jewellery.

Investment proposals in non-financial services included areas such as telecommunications, medical services and software development services.

About 65 per cent of the outward investments was routed to tax-friendly places. For 2007-08, 35 per cent of the proposals were aimed at Singapore, followed by Netherlands (23 per cent) and British Virgin Islands (7 per cent).