'India attracts record FDI in '06; FDI equity to cross $11bn'

New Delhi, Dec 27: India has attracted record foreign direct investment (FDI) inflows in 2006 with FDI equity inflows during 2006-07 expected to cross 11 billion dollars, more than double the equity inflows of 5.5 billion dollars last year, Commerce and Industry Union Minister Kamal Nath today said.

Giving an overview of performance of the Department of Industrial Policy and Promotion (DIPP) during the year, the minister said, "Once the reinvested earnings of foreign companies already present in India is also taken into account in FDI inflows, which is the world-wide practice, the total FDI inflows in 2006-07 could be as high as 14 billion dollars, compared to 7.7 billion dollars last year."

In addition, the contribution of manufactured products to exports grew with a share of about 84 per cent in total merchandise exports during 2005-06. Manufacturing sector recorded a growth rate of 22.6 per cent in 2003-04, 29.7 per cent in 2004-05 and 23.4 per cent in 2005-06, the minister pointed out.

Industrial production grew by over 10 per cent during April-October 2006, a major highlight of this being the high level of growth recorded by the manufacturing sector.

"Between April and October 2006, the growth rate of manufacturing was 11.2 per cent over the corresponding period of the previous year and there are indications that this rate will be maintained and probably bettered and the targeted growth rate of 12 per cent in manufacturing in the Eleventh Plan is likely to be achieved in the Tenth Plan terminal year itself," he said.

Continuous liberalisation in FDI policy and simplification of procedures were contributing immensely to attracting increased FDI into India.

The fact that the government was now annually conducting a review of the FDI policy and procedures had given an added confidence to the foreign investors that their concerns were addressed on a continuous basis.

Also, India was now "the flavour of the year" for most foreign investors given the various policy and promotional measures being undertaken by the Prime Minister himself, both at home and in his tours abroad.

"There have been huge investments coming in the software industry, financial services and manufacturing. The manufacturing investments are the 'first mile investments' in as far as these are likely to be followed up by further investments to complete the projects and also for their further expansions," Mr Nath said.

Along the Delhi-Mumbai Freight Corridor, a 1,450-km-long industrial corridor to attract further investments including from Japan was proposed to be set up along with all the essential physical infrastructure needed for industrial and export growth, such as, roads, connectivity to ports, development and expansion of ports, power projects and industrial estates/SEZs, an official release said.

The development of this corridor would also make the process of industrial growth more regionally balanced as the corridor would pass through 5 states namely, Uttar Pradesh, Haryana, Rajasthan, Gujarat and Maharashtra.

A task force of all the ministries and states concerned is being constituted to work out its details and the Prime Minister has been requested by the Commerce and Industry Minister to convene a meeting to give boad directions to the task force on development of this important project.

India successfully completed transition to a modern intellectual property regime during 2006. With the amendment of the Indian Patent Act 1970 last year, more than 25,000 patent applications were filed and 1,80,000 trade marks registered in the past year.

Product patents were introduced for pharmaceuticals and agro-chemicals last year, and consequently, filing and grant of patents had shot up.

The transition to a new IPR legal regime had been accompanied by a near completion of a Rs 154 crore modernisation programme of India's Patent and Trade Marks Offices.

All the four new networked Intellectual Property Offices in the four metros were commissioned this year and a major exercise for capacity building of the examiners and other staff was under way.

Finally, India took the lead in the protection of traditional knowledge and prevention of bio-piracy. At meetings of the World Intellectual Property Organisation (WIPO), India initiated a proposal to make disclosure of the origin of genetic resources mandatory.

India had moved an amendment to the TRIPs agreement at the World Trade Organisation (WTO) too to make such disclosures mandatory in order to prevent bio-piracy and preserve traditional knowledge. The project on preparation of a digital library on traditional knowledge (TKDL) covering medicinal plants and herbal-based cures covering the Indian systems of medicine was nearing completion and negotiations with other Patent Offices on sharing this database of over 1.5 lakh formulations had been initiated.

UNI