Business Daily from THE HINDU group of publications
Tuesday, Nov 21, 2006
Foreign Direct Investment
Industry & Economy - Economy
States - Tamil Nadu
FDI inflows double in first half to $4.4 b
Mr Kamal Nath
New Delhi , Nov. 20
Tamil Nadu has registered the best growth in foreign direct investments inflows (equity component alone) in the country in the first six months of the current fiscal.
Official statistics of the Commerce and Industry Ministry show that FDI inflow into Tamil Nadu and Puducherry in April-September stood at $437.3 million, which represented a 226.87 per cent increase on a year-on-year basis. However, the Delhi region emerged as the destination with the largest FDI inflows at $936.5 million in the first half of the current fiscal.
In April-September 2006, the country received FDI inflows (only equity component) of $4.4 billion, which is a 100 per cent increase over the $2.2 billion received in the same period last year. September alone saw FDI inflows (excluding reinvestment of earnings) of $916 million as against $282 million.
"Much of the investments received in the first half are first mile investments. The second and third parts would follow these investments. India is on the radar and these investments reflect the new confidence about the country and the Government," the Union Commerce and Industry Minister, Mr Kamal Nath, told newspersons here.on Monday.
He expected the FDI inflows (equity component alone) in the current fiscal to be in the range of $9-10 billion, he said. "If the earnings reinvested are also taken into account, it would be about $15 billion)," he said.
Meanwhile, Singapore has emerged as the second largest source of FDI inflows into the country. Mr Kamal Nath said that Singapore has moved ahead of the US and the UK to better its position from 7th to 2nd place. Asked about the main reasons for this improvement, Mr Kamal Nath pointed out that Singapore was a major investment hub and that the comprehensive economic cooperation agreement with that country was showing results. In April-September, FDI inflows from Singapore stood at $481.7 million (305.16 per cent growth)
The Mauritius continues to be the most preferred route for FDI into the country. In the first half of the current fiscal, FDI inflows from the Mauritius stood at $2.545 billion. This represents a 185.49 per cent increase on a year-on-year basis.
Services topped the sectoral growth in FDI inflows in the first six months of the current fiscal. Data available with the Commerce and Industry Ministry shows that significant growth in the services, telecom and fuel sectors have led to the overall doubling of FDI inflows in the first half of the current fiscal.
FDI in retail
Meanwhile, on FDI in retail, Mr Kamal Nath said that his Ministry has approved seven of the 11 applications made to it. The Minister also said that he has advised the large retailers in the world to invest in the back-end and into the logistics rather than look at the retail end.
"They should become suppliers to our kirana shops and neighbourhood stores," he said, adding that a model that would solve the displacement of small retailer was yet to be found.
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