Services And Real Estate Are Biggest FDI Attractions

India received a massive $20.8 billion of foreign investment in energy, services, construction and real estate sectors during the last four financial years as high economic growth lured multinational companies to set up or expand operations. The services sector witnessed the biggest spurt in foreign direct investment (FDI) flows, from $444 million in 2004-05 to $6.61 billion in 2007-08. Real estate sector, which was opened up for foreign investors in 2004-05, saw FDI leapfrogging from nil to $2.17 billion in 2007-08.FDI inflows in the power sector were $967 million in 2007-08. The sector lagged in attracting foreign investments due to lack of clarity in government policy at both central and the state level. Now, with the firming up of the policy guiding setting up of ultra mega power plants, the sector is expected to attract more FDI.

The petroleum and natural gas sector witnessed FDI inflows of $113 million in 2004-05. The sector, however, attracted a significant chunk of investment of $1.42 billion last fiscal, thus becoming one of the most favored sectors.

FDI inflows in the construction sector also witnessed a huge jump from $151 million between 2005-06 and 2006-07 to more than $1 billion in 2007-08.

Inflows in computer software and hardware sector rose from $539 million in 2004-05 to $2.61 billion in 2006-07, but declined to $1.41 billion in 2007-08.

The telecom sector witnessed a rise in FDI inflows, from $125 million in 2004-05 to $1.26 billion in 2007-08. However, investments in the telecom and chemicals sectors saw a slump between 2005-06 and 2006-07. The automobile industry, metallurgical and chemicals sectors also witnessed a steady flow of foreign investments during the last four years.
Commerce and industry minister Kamal Nath said, “FDI is a means to supplement domestic investment for achieving higher level of economic development and providing opportunities for technological upgradation as well as access to global managerial skills and practices”.
The government has eased FDI norms for a host of sectors, but has kept areas such as retail, (except single-brand retailing), atomic energy, lottery, gambling and betting, business of chit fund and trading in transferable development rights out of the ambit of foreign investors. In the last FDI review, the government allowed 100% FDI in titanium mining, and maintenance, repair and overhauling facilities for aircraft.

With India allowing FDI up to 100% through the automatic route in many sectors, power, petroleum and natural gas, services, construction and real estate have attracted foreign investment worth $ 20.8 billion in the last four years. The services sector has witnessed the biggest spurt in FDI, from $ 444 million in 2004-05 to $6.61 billion in 2007-08 followed by real estate which saw FDI leapfrogging from zilch to $2.17 billion in 2007-08.

FDI inflow in the power sector was $967 million in 2007-08. The sector lagged slightly behind in attracting foreign investments due to lack of clarity in government policy at both central and the state level. Now, with the firming up of the policy guiding setting up of ultra mega power plants, the sector is expected to attract more FDI.

The petroleum and natural gas sector witnessed FDI inflows of $113 million in 2004-05. The sector, however, attracted a significant chunk of investment of $1.42 billion thus becoming one of the most favored sectors last fiscal.

FDI inflows in the construction sector also witnessed a huge jump from $151 million between 2005-06 and 2006-07 to more than $1billion in 2007-08.

While inflows in the computer software and hardware sector rose from $539 million in 2004-05 to $ 2.61 billion dollars in 2006-07, the inflows declined to $ 1.41 billion in 2007-08 showing a decline in growth. The telecom sector witnessed FDI inflows from $ 125 million in 2004-05 to $ 1.26 billion in 2007-08. However, investments in the telecom and chemicals sectors saw a slump between 2005-06 and 2006-07.

India’s automobile industry, metallurgical and chemicals sectors also witnessed a steady flow of foreign investments during the last four years. Commerce and industry minister Kamal Nath said “FDI is a means to supplement domestic investment for achieving higher level of economic development and providing opportunities for technological upgradation as well as access to global managerial skills and practices”.

The government has eased FDI norms for a host of sectors, but has kept areas such as retail, (except single brand retailing), atomic energy, lottery, gambling and betting, business of chit fund and trading in Transferable Development Rights (TDRs) out of the ambit of foreign investors.

In the last FDI review, the government allowed 100% FDI in sectors such as titanium mining, maintenance, repair and overhauling facilities for aircraft.

One Comment

  1. Posted July 17, 2008 at 3:13 am | Permalink

    But why can we say that to be compare in that both level ?

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