FDI Approvals in 2002

The FDI Approvals in 2002 show a prominent rise from the FDI approval of the preceding year. Mauritius, USA and Japan were the main source of such investments. The Government decided to remove or relax FDI ceiling on areas like Ports, airports, public services and pharmaceuticals.

Sectors like Agriculture, Defense and strategic industries, Atomic energy, Petroleum (marketing, refining and exploration) and Banking were still kept away from such investments.

Quantum of FDI in 2002 in India that were made by some of the prominent foreign countries are as follows:

• USA - US $ 323 million
• Germany - US $ 107 million
• Japan - US $ 211 million
• France - US $ 125 million
• Mauritius - US $ 1625 million

The positive effects of FDI inflows in 2002 are as follows:

• Government to remove or relax FDI ceiling on areas like Ports, airports, public services, pharmaceuticals
• To be more focused on specific sectors
• To develop special economic zones, which would be governed by simple laws and administrative process
• Speedy reforms in domestic sectors, especially urban infrastructure, power and real estate

FDI inculcated the following changes:

• The process of privatization of Government of India enterprises
• Increased numbers of mergers and acquisitions
• Increased the growth rate of the Indian manufacturing industry
• Facilitated formation of joint ventures of Indian companies with foreign countries

The FDI limits of some of the prominent Indian industries are as follows:

• Drugs and pharmaceuticals - 74%
• Telecommunication - 49%
• Aviation - 40%
• Housing and real estate - 100%
• EHTP and STP - 24%
• Coal and lignite - 49%
• Advertising - 74%
• Films - 100%
• Hotel and tourism - 51%

Restrictions of FDI:

• Agriculture
• Defense and strategic industries
• Atomic energy
• Petroleum (marketing, refining and exploration)
• Banking