FDI inflow on course to $12 billion target

India seems to be on track to attracting $12 billion of foreign direct investment in 2006-07, with inflows during July touching $1.16 billion, an increase of over 255 per cent from $0.32 billion last July.

During the first four-month period (April-July), inflows reached $2.9 billion, against $1.5 billion last year, an increase of over 90 per cent.

Stating this, Commerce and Industry Minister Kamal Nath said the government was hoping to attract $12 billion of FDI in the current fiscal, which is over 44 per cent higher than the previous financial year's inflows of $8.3 billion. FDI equity inflows into manufacturing alone during April-July are estimated at $668 million.

Nath said the huge increase in July inflows was due to investments of $380 million by Barclays Bank in AAA Global Ventures Pvt Ltd and $377 million by TH Holdings in Mphasis BFL Ltd.

Other major investments during the month included those of Global Communication Service Holdings, Mauritius, in Aircel Ltd, Flextronics and Aspen Pharmacare Holdings Ltd.

Ministry officials said some of the investments in the pipeline included German company Thyssen's.

The 10 sectors attracting the highest FDI into India include electrical equipment, services, telecommunications, transportation, fuels, chemicals, food processing industries, drugs and pharmaceuticals, and cement and gypsum products.

Asked about the stalemate on the FDI in telecommunications, Nath said: "The matter is not stuck. We are looking into it. The regulatory structure being thought about is not India-specific. Countries like the US have it. We are building a regulatory framework not different from theirs."

Nath said there was no difference of opinion between the government and the Left regarding investment.