India leads South Asian region in FDI flows

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{image-Foreign Direct Investment_31082008.jpg}New Delhi, Aug 31: An RIS Report highlights the fact that India not only leads the South Asian region in terms of inward flow of Foreign Direct Investment (FDI), but also has the largest outward flow of FDI -- a measure of its openess and its competitive strength.

India tops the chart with FDI inflow of about 17 billion dollars in 2006-07, while its neighbour and arch political rival Pakistan attracted only 4.27 billion dollars in the same fiscal. These facts have been highlighted in the 'South Asia Development and Cooperation Report' brought out by the Research and Information System for Developing Countries (RIS), an autonomus think tank funded by the Ministry of External Affairs.

Next stands Bangladesh, which got 625 million dollars FDI in fiscal 2006-07, while Sri Lanka grabbed 480 million dollars, but Nepal hit badly by political turmoil could attract no foriegn investment.

Other countries including Afghanistan, Bhutan and Maldives could attract less than 15 million by way of FDI in financial year 2006-07.

India again topped the list in terms of outward flow of FDI originating from the South Asian region with 9.67 billion dollars, followed by Pakistan 0.11 billion dollars and Sri Lanka registering FDI outflow of 0.03 billion dollars in FY07.

The outward flow of FDI in such a large measure is a recent phenomena of the Indian economy with Indian firms buying big and small companies abroad. In fact, in recent years the gap between outward and inward flows is closing.

Bangladesh registered eight million dollars FDI outflow, while Afghanistan, Bhutan, Maldives and Nepal could not open their account in this regard.

South Asian countries are generally low income nations, the total FDI originating from the region was 9.82 billion dollars in 2006-07.

Established in 1984, RIS specialises in trade and development issues.

The data in the Report shows that India's FDI outflow has almost trippled to 17 billion dollars in 2006-07 from 6.6 billion dollars in the previous fiscal. In the current fiscal, India FDI inflow is estimated to be more than 25 billion dollars.

However, Pakistan investment inflow doubled to 4.2 billion dollars in FY07 from 2.2 billion in last fiscal, while Bangladesh registered negative growth at 625 million dollars in 2006-07 from 692 million dollars in FY 06.

On other hand, India FDI outflow increased to almost four times to 9.67 billion dollars in 2006-07 from 2.49 billion dollars in previous fiscal, while Pakistan registered more than double FDI outflow at 107 million dollars from 44 million dollars in FY06.


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