India gets FDI of $2.4 bn in Jan-March

NEW DELHI, May 14: The recession-hit Indian economy got a major boost with inflow of $ 2.38 billion US foreign direct investment (FDI) du...

NEW DELHI, May 14: The recession-hit Indian economy got a major boost with inflow of $ 2.38 billion US foreign direct investment (FDI) during January-March this year compared to just $ 3.3 billion for the whole of 1998.

They projected a conservative FDI inflow of around $ 4 billion (just $ 1.6 billion in the remaining nine months) during the year with approvals of over $ 10 billion.

In the month of March alone FDI inflow in India amounted to $ 1432 billion, which officials explained was mainly due to fructifying of some major power projects. Since 1991 total FDI approval stood at over $ 60 billion while inflow was around $ 18 billion, officials said.

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Dispelling the perception that foreign investment was largely going into consumer goods sector, officials said during January-March period the maximum approvals and inflows were in the infrastructure, transport and electrical equipment including computer software.

Nearly 36 per cent of the inflow during the first quarter of current calendar year was in transport and electrical equipment sectors alone. They said political uncertainty had not been reflected either in FDI applications or during interaction with foreign investors.

FDI inflow and approvals had slowed down in 1998 mainly due to economic conditions in India and the rest of the world, officials said. During 1998 FDI approvals had come down by almost half at $ 7.8 billion from $ 15.3 billion in the previous year.

However, there was not much of a perceptible fall in inflows that amounted $ 3.37 billion last year compared to $ 4.5 billion in 1997.

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Officials pointed that almost all the multinationals had made their presence in India and inflows were likely to increase gradually with more long gestation and capital intensive infrastructure projects getting off the ground.