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

New Delhi, Dec 27 (UNI) 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, according to Commerce and Industry Union Minister Kamal Nath.

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.

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