Need to create favourable environment to attract FDI: PM

New Delhi, Feb 16 (PTI) In the backdrop of demands foropening multi-brand retail for FDI and liberalising the regimefor other sectors like defence, Prime Minister Manmohan Singhtoday admitted tthere was a need for "favourable" environmentfor fund flow from abroad.

"I think we need to strengthen the resolve to createfavourable environment for larger flow of funds from abroad",he said.

Addressing editors of electronic media here, he, howeveradded the government''s policies could not be blamed for dropin FDI as the current international scenario was promptingforeign funds to move out from emerging markets.

"It is not our mistake (downflow in FDI). Theinternational situation is such that funds are moving out ofemerging markets. We are today functioning in an environmentwhere what happens outside affects us," Singh said.

"Therefore is not easy to say that what happens to fundflow is entirely a function of our policy," he added

The Prime Minister also stated that policies followedby the developed economies also played a part in foreigninvestments coming into India.

"It is also a function of what policies our otherfriends, particularly, the developed countries adopt," hesaid.

During April-December of the current fiscal, FDI inflowsdeclined by 23.14 per cent to USD 16.03 billion over the yearago period.

The Government has taken several steps like initiatingdiscussions on opening multi-brand retail for FDI.

It is also in process of analysing feedbacks receivedfrom stakeholders to further liberalise the defence sector.

Currently, 26 per cent FDI is allowed in defencemanufacturing.