Impact of global meltdown on FDI

Rajya Sabha

Foreign Direct Investment (FDI) equity inflows in the country have increased from US $ 5.5 billion in 2005-06 to US $ 27.31 billion in the year 2008-09. The FDI inflows in 2007-08 were US $ 24.58 billion and increased to US $ 27.31 billion in 2008-09, despite the economic slowdown, showing a percentage growth of 11% over the previous financial year.

Government has put in place a liberal and investor-friendly policy on FDI under which FDI up to 100% is permitted on the automatic route in most sectors/ activities, including infrastructure and Research and Development (R&D).  The UNCTAD World Investment Reports (WIR) 2007 & 2008, in their analysis of the global trends and sustained growth of Foreign Direct Investment (FDI) inflows, have reported India as the second most attractive location for FDI for 2007- 2009. India has retained the second place in A. T. Kearney's 2007 Foreign Direct Investment Confidence Index, a position it has held since 2005. Government has also announced a slew of measures to accelerate the demand in the economy which would enable India to continue as an attractive investment destination. Under the liberalized economic environment, investment decisions of investors are based on the macro-economic policy framework, investment climate in the state, investment policies of the transnational corporations and other commercial considerations.

The Government of India continues to make efforts to increase economic cooperation with the developing as well as developed countries through different fora such as Joint Commissions/Joint Committees, other bilateral channels like interaction with the delegations visiting the country and organizing visits abroad for discussions on issues of mutual interest and business/ investment meets between Indian and foreign entrepreneurs to stimulate foreign investment into India. The Department of Industrial Policy and Promotion also participates in discussions covering industrial cooperation organized by other Ministries and Departments of Government of India and the Joint Business Council meetings.  

The Government of India also undertakes investment promotion activities through organisation of Destination India and Invest India events in various countries with FDI potential to create awareness about the investment climate and opportunities in India, as well as to provide support to potential investors.

The Government of India, in partnership with various State Government and Business Associations, is making concerted efforts to make regulations conducive for business.  In addition, the Government has initiated to implement e-Biz Project, a Mission Mode Project under the National e-Governance Project, to provide online registration, filing payment services to investors and business houses.

FDI EQUITY INFLOWS DURING FINANCIAL YEAR 2008-09

This information was given by Shri Jyotiraditya M. Scindia, Minister of State for Commerce & Industry, in a written reply in the Rajya Sabha today.