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FDI inflow ballooned 61% in eight months

BS Economy Bureau

The first eight months of the current fiscal has witnessed an increase of 61 per cent in foreign direct investment inflows into India.

According to the Economic Survey, FDI inflows rose to $ 2.37 billion during April-November 2001 against $ 1.47 billion in the corresponding period in the last fiscal.

The source and direction of FDI, however, remained by-and-large unchanged during the last decade with companies registered in Mauritius and the United States being the principal source of FDI into India during 2000-01, followed by Japan and Germany, the Survey said.

The bulk of FDI was channelised into computer hardware and software, engineering, services sectors such as telecommunications, electronic and electrical equipment, chemicals and food and dairy products. The FDI inflows during the current fiscal are, however, lower than the $3.56 billion achieved in 1997-98.

Of the $2.37 billion inflows during the eight month period this fiscal, $1.31 billion came through the Foreign Investment Promotion Board and the Secretariat for Industrial Approvals route against $ 915 million during the April-November 2000-01.

Inflows routed through the Reserve Bank of India, which included those sectors under the automatic route, accounted for $ 538 million in April-November 2001-02, as against $ 235 million in the previous fiscal.

Non-resident Indians invested $ 484 million through acquisition of shares of Indian companies in the eight months against $ 269 million in the corresponding period last year, representing a rise of nearly 80 per cent.

During the year, the government also undertook a series of liberalisation initiatives including 49 per cent FDI in private banking, 100 per cent for B2B e-commerce, courier services, oil refining, hotel and tourism sectors, drugs and pharmaceuticals, mass rapid transport systems, including associated commercial development of real estate.

The government also permitted NBFCs to hold 100 per cent foreign equity in holding companies and further permitted 26 per cent FDI in defense production.

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