Date:04/07/2009 URL: http://www.thehindu.com/2009/07/04/stories/2009070456271500.htm

Business

India remains preferred FDI destination

Special Correspondent

Foreign direct investment totalled $46.5 billion in 2008

NEW DELHI: Notwithstanding global meltdown and the financial crisis impacting major economies of the world, India continued to remain as the preferred and attractive foreign direct investment (FDI) destination attracting nearly $46.5 billion of FDI during 2008.

According to the Economic Survey, FDI flows in 2008-09 were also the reflection of the confidence of foreign investors in the growth prospects of the Indian economy.

“India continues to retain its position as a preferred destination for investments,” it states. There had been an increase in FDI during 2008-09 over the previous year, it said.

With regard to foreign institutional investors (FIIs), the Survey said there were signs that the FIIs who had recorded net outflows in 2008-09 might have returned to the Indian market in the last two months.

According to an UNCTAD study, FDI into India went up from $35.1 billion in 2007 to $46.5 billion in 2008 even as global flows declined from $1.9 trillion to $1.7 trillion during the period. It has suggested that FDI limit in defence industries should be raised to 49 per cent from 26 per cent at present and allow up to 100 per cent FDI on a case-by-case basis. Besides, the survey suggested increasing FDI cap in the insurance sector from the existing 26 per cent to 49 per cent and for specialised insurance companies to 100 per cent.