India has garnered foreign direct investment (FDI) inflows of $1.74 billion during November 2009, a 60% increase over the $1.08 billion recorded in same month last year. This surge in FDI inflows is significant because India continued to be held as a safe destination for investment despite global recession and financial crises in world’s largest economies.
According to the Department of Industrial Planning and Policy, India has received $23.82 billion up to October 2009 as against $30.58 billion in the fiscal year of 2008-09. In the month of October this year, FDI inflows have notched $2.33 billion as against $1.49 billion during the same month in 2008. However, FDI inflows during April-November period of the current fiscal year declined marginally to $19.38 billion from $19.79 billion a year ago on the backdrop of the impact of global financial crisis felt in earlier months of FY 10.
India’s share of world FDI leaped from 0.78% in 2005 to 2.45% in 2008. The World Investment Report 2009 has placed India in the list of top five most attractive FDI destinations alongside China, US, Brazil and Russia.
Union Minister of Commerce and Industry, Anand Sharma has released the first draft document on consolidation of FDI policy. Sharma asserted that the consolidated framework is aimed at providing a greater clarity on the existing rules to foreign investors, but will not alter the current FDI norms or sector specific caps. This document intends to consolidate foreign investment policy notified through a slew of Press Notes by the Department of Industrial Policy and Promotion (DIPP) and various Reserve Bank of India (RBI) circulars, into a single regulatory framework. He also hoped that having a single policy platform would also ease the regulatory burden for the government.
In India, six top states namely, Maharashtra, Gujarat, Karnataka, New Delhi, Tamil Nadu and Andhra Pradesh jointly attracted about 81% of the total FDI during the fiscal year 2009.