India's FDI inflows might touch $7 bn in 2005-06

India was likely to attract around $7 billion in foreign direct investment (FDI) during the current financial year against $5 billion that flowed in during 2004-05, an official said today.

"Going by the trends in the first five months of the current fiscal, we should be able to get FDI to the tune of $7 billion. The increase is because of the increased inflows through the automatic route," Ajay Dua, secretary, department of industrial policy and promotion, said. He was speaking at a curtain-raiser event on "India R&D 2005" organised by Ficci.

Dua pointed out that while India did not recognise pre-establishment of firms, it accorded "national treatment" to all foreign companies once investment started to come in. India also gave benefits to countries with which it had a double-taxation agreement, he added.

He said India was expecting a manifold increase in patents applications under the modified patents regime. "In 1995, India had received 4,000 patents applications. This increased to 15,000 last year. Of the 15,000 applications, 1,700 applications were from US companies. We expect applications to increase by leaps and bounds this year," he said.

Dua said his ministry had already invited public comments on the rules and the manual of the modified patents regime and these were expected to be finalised by September-October this year.

Terming India as an important research and development destination, Dua said there were nearly 2000 registered R&D institutions in the country and 6,000 PhDs awarded annually.

Besides, the country produced 200,000 engineers and 300,000 science graduates and post-graduates annually. He further added that of the Fortune 500 companies, 120 companies already had a presence in India.

Speaking on the occasion, Ashish Gupta, COO Evalueserve, said according to the Bureau of Labour Statistics, nearly 50 per cent of the present R&D work force in the US would become eligible for retirement by 2012, providing a huge employment opportunity for specialists from countries like India.