USD 100 bn FDI milestone for India

New Delhi, Oct 4 (PTI) India has crossed the USD 100
billion milestone in foreign direct investment through equity
since 2000 up to July this year testifying the country's
increasing profile as a safe and sound investment destination
in the midst of the global financial crisis.

As much as 44 per cent of the money came through the
Mauritius route, apparently because the investors wanted to
take advantage of India's double taxation avoidance treaty
with the island nation.

The cumulative FDI inflows since 2000 and up to July 2009
amounted to USD 100.33 billion. The inflows in the first four
months of the current financial year was USD 10.49 billion,
according to data compiled by the Department of Industrial
Policy and Promotion.

The other big investors included Singapore, the US, UK
and the Netherlands.

Commenting on the USD 100 billion milestone, economists
said India is being perceived as a safe and dynamic
destination for global investors.

"This is a reflection that India is being taken as a safe
and dynamic destination for investment as the economy is
growing at 6 per cent. The investors also want to diversify
their portfolio from China by investing here," Rajiv Kumar,
CEO and Director of economic think-tank ICRIER said.

The FDI would further improve if the economic recovery
continues.

"We did not receive much FDI initially...since 2008 we
have started receiving good numbers...there are signs of
economic recovery in a few countries and I think inflows will
improve with the economic recovery," CRISIL Principal
Economist D K Joshi said.

Ficci Secretary General Amit Mitra said FDI not only
brings money but also new technology and managerial
capabilities.

"FDI's main impact comes from new technology, new
managerial capabilities, new benchmarks in corporate
functioning," Mitra said.

India reached the USD 100 billion mark at a time when the
global financial crisis has had a dampening impact on FDI
flows which are expected to fall this year.
According to the World Investment Report, 2009, of the UN
body UNCTAD, global FDI flows will shrink by 30 per cent in
2009 and recover only marginally during the next year,
The report found the pattern of FDI flows had been varied.
The inflows of developed countries plunged in 2008 by 29 per
cent, in contrast the developing and transition economies saw
inflows rise of 37 per cent in 2008.

"Although declining (as compared to previous years) FDI
flows to developing countries have proved to be more resilient
than other capital flows such as portfolio investment and
bank lending. The main reasons for this is that FDI is more of
a long term nature than capital flows," the report said.
India's services sector topped the table, receiving 23 per
cent of the cumulative equity FDI inflows followed by computer
software, hardware, telecommunication and real estate. PTI RR
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