FDI's share of investment doubles in 3yrs

The gradual delicensing of sectors and ease in doing business for global companies has led to foreign direct investment (FDI) more than double its share in the total investment in India between 2003-04 and 2006-07 with inflows recording a five-fold rise in the last three years.

"As a percentage of total investment, this (share of foreign direct investment) has gone from 2.55% in 2003-04 to 6.42% in 2006-07," according to a year-end review of the department of industrial policy and promotion (DIPP).

DIPP said after receiving FDI of $15.7 billion dollars in the last fiscal, an ambitious target of $30 billion dollars had been set for 2007-08. Till August this fiscal, inflows of $6.44 billion were recorded with maximum funds coming through Mauritius.

Reflecting the growing interest of foreign investors in the country, the share of FDI in India's gross domestic product (GDP) has also gone up from a mere 0.77% to 2.31% in the last financial year.

"Due to progressive delicensing, only a handful of sectors remain within the ambit of compulsory licensing on account of safety, security and environmental concern," the review said.

The sectors that are in the licensing regime are distillation and brewing of alcoholic drinks, cigars and cigarettes and manufactured tobacco substitutes, defence equipment and all types of industrial explosives.