FDI Flow in India 2007

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Abstract: FDI Flow in India 2007 touched USD 15.7 billion, which represents a growth rate of 184 percent. India is considered to be the most appropriate country for business and therefore Foreign Direct Investment is enormously high in the country.

An Overview of FDI Flow in India 2007-

FDI Inflows to India have been growing at a high rate for the last few years. UNCTAD's World Investment Report states that India ranked fourth in terms of receiving FDI during the year 2006-07, which amounted to USD 22 billion with a growth rate of 126 percent.

The Foreign Direct Investment Inflows during the year 2007-08 was USD 5,614 million as against USD 2,848 million in the previous year during the same period with a growth rate of 97 percent. The total FDI Inflows in India during the epoch August 1991 to July 2007 was USD 60,242 million. Between 2001-02 and 2006-07, FDI inflows in India increased by about two and a half times.

Foreign Direct Investment in India for the year 2007-

Foreign Direct Investment (FDI) inflows into India reached USD 4.9 billion in the first quarter of the year 2007. The major contributor in this alarming FDI Inflow had been the British Telecom major called Vodafone. It led to FDI Inflow of USD 801 million in India's growing telecom industry. FDI Flow in India during April-June 2007 had been USD 1.7 billion, which is apparently a rise of 185 percent as against in the same period of 2006. During January-June 2007, FDI Inflows in India increased by 216 percent as against USD 3.6 billion in the previous year. Foreign Direct Investment in India has generated maximum employment in the year 2007. Delhi received FDI Inflow of around USD 1.3 billion till May 2007 which accounted for a growth of 36 percent of the total FDI Inflows in India. Mumbai, Bangalore and Chennai have contributed to two-thirds of the total FDI inflows into the country. Matsushita Electric Works of Japan brought in USD 342 million in India in 2007. Mauritius had been the biggest source of Foreign Direct Investment in India in the year 2007. Services, telecom, electrical equipment, real estate and transportation were the five major sectors that received maximum foreign direct investment inflows in India in the year 2007.

Major Sectors in India Attracting FDI Inflows till June 2007 (from August 1991) -

  • Services (USD 9,443 million)
  • Electrical equipment (USD 8,964 million)
  • Telecommunication (USD 4,880 million)
  • Transportation (USD 3,856 million)
  • Fuels (USD 2,892 million)
  • Chemicals (USD 2,465 million)
  • Construction (USD 1,912 million)

Role of Government in FDI Inflows in India-

The Government of India has granted permission to foreign investors to set up Joint Venture companies with various private sector units in India. This task is carried out with the aim to establish country-specific investment promotion centers in India and overseas countries. The ten countries who will be involved in setting up country-specific investment promotion centers in India include, US, Japan, Taiwan, UK, Germany, Singapore, France, South Korea, Switzerland and Italy.

Last Updated on 05/07/2011