The flurry of M&A activities pursued in the country by global corporate giants has pumped up the volume of direct investments in India, which is projected to touch $8 billion this year, a report by Institute of International Finance (IIF) said."The high performance of the Indian economy and the improving policy environment are expected to contribute to an acceleration in direct investment this year to $8 billion from $6.5 billion in 2006," the IIF report said.Following global cues in other countries, merger and acquisition activity is helping to support direct investment in India as the report adds that the environment in emerging markets remains favourable for such kind of outlay.The institute, a global association of financial institutions, projects the direct investment would rise to a whopping $211 billion this year - the highest level recorded from the $185 billion recorded in 2006.The continued upward movement of equity prices has provided a significant boost to the value of cross border mergers and acquisitions, the report said.This, in turn, has led to increased investment by collective investment funds, mainly private equity and related funds.With low interest rates and increasing financial integration playing a positive impact, funds shored in by the private equity firms to undertake direct investment in emerging markets is set to create huge inflows, the report adds.
