FDI - Rising Up the Ranks

Foreign direct investment (FDI) into India has shown signs of recovery in the wake of the global financial crisis, with investors looking to take advantage of the country's attractive long-term growth potential. Going forward, we expect inward FDI to continue gathering pace, particularly into consumer- and infrastructure-orientated sectors. Increasing capital inflows bode well for our medium-term constructive view of the Indian rupee.Improved global sentiment and strong industrial output numbers in India are increasingly attracting foreign investors in the country. Other factors being attributed to the revival in foreign direct investment (FDI) in recent times include increasing consumer confidence.

Being the 10th largest economy in the world and the 4th in terms of People's Propensity to Purchase(PPP)India has emerged as a potential player for FDI and NRI investment. India has a large reservoir of skilled laborer at internationally competitive cost and a large entrepreneurial base and a diversified manufacturing structure makes it easy to find partners for collaborations .The country has a vast scientific and technical manpower of over 20 million whose size exceeds the population of Taiwan .The number of literates in India is more than the combined population of France and Japan.

India has been ranked at the third place in global foreign direct investments this year, following the economic meltdown, and will continue to remain among the top five attractive destinations for international investors during the next two years, according to United Nations Conference on Trade and Development (UNCTAD) in a new report on world investment prospects titled, ‘World Investment Prospects Survey 2009-2011'.

India attracted FDI inflows of US$ 1.74 billion during November 2009, a 60 per cent increase over the US$ 1.08 billion achieved in same month last year. The cumulative amount of FDI inflows from August 1991 to December 2009 stood at US$ 127.46 billion, according to the latest data released by the Department of Industrial Policy and Promotion (DIPP). India attracted FDI equity inflows of US$ 1.54 billion during December 2009. On a cumulative basis, FDI equity inflows of US$ 20.92 billion were recorded during April-December 2009.