FDI inflow on course to $10 billion target

With several top global companies including General Motors, Nissan, Suzuki, Honda and Mitsubishi Chemicals stepping up their investments in India, FDI inflow appears well on its way to achieving the target of $10 billion.

Inflows in the first quarter have increased by 47 per cent to $1.74 billion against $1.18 billion during April-June 2005-06.

FDI inflows (equity capital components only) in the month of June alone increased by a record 102 per cent to $534 million from $ 264 million in June 2005.

Commerce and Industry Minister Kamal Nath told reporters that the huge surge in June inflows was on account of $278 million from Global Communications Services Holdings Ltd, Mauritius, into Aircel Ltd, a telephone communications services company, $99 million from Associates Financial Services, Mauritius, into Citi Consumer Finance Ltd and $120 million into Orange Realty Pvt Ltd from an investment company in Mauritius.

Another Pune-based developer, Mantri Developers Ltd, also attracted $67 million while $40 million each came in from Mauritius and USA respectively into a coal beneficiation company and into Flextronics Software Systems, an end-to-end communications solutions company from USA, Nath said.

The minister said the inflows in the year was expected to increase further with General Motors setting up a car manufacturing facility in Maharashtra at a cost of $300 million. Similarly, Nissan and Suzuki of Japan have also decided to jointly collaborate to produce half-a-million passenger cars/mini vans at Manesar near Delhi.

The total investment could be between $700 to 800 million over the next three years and it will be a base to export 0.34 million new "A" segment passenger vehicles to Europe. A large delegation of the two companies is visiting India in the first week of September 2006 to review the arrangements.

Mitsubishi Chemicals has approved a $370-million expansion programme of its existing petro-chemicals plant at Haldia, while Honda is expanding its facility at Noida and is investing $200 million to produce new brands/models of cars.