News: India eyes $30 billion FDI in 2007-08

(PTI 25/04/2007) New Delhi - The Government today said it is aiming at $30 billion in Foreign Direct Investment this year on the back of huge interest in the country from auto and electronics manufacturers.

"We are toying with the idea of keeping a goal of $30 billion of FDI in the current year, of which $26 billion would be through investments in equity, while the rest will be from reinvested earnings," Secretary in the Department of Industrial Policy and Promotion Ajay Dua said at an ICRIER seminar today.

He said this FDI would constitute 3.3 per cent of the GDP, up from the 2.5 per cent last fiscal. In 2006-07, FDI inflows touched $19 billion, of which $3.5 billion were reinvested earnings.

The sectors, which would see increased FDI inflows in the current year are mainly manufacturing, auto, semiconductor, electronic hardware and services, Dua said.

He said the Asian countries are gradually improving their share of FDI. "Half of the investment being made in Asia is intra-regional and the major contributors to this are countries like Japan, Taiwan, Hong Kong, Singapore and Korea," he added.

Dua said large investments need to be put in to develop physical infrastructure, for which investments currently constitute less than four per cent of the GDP.

"We need to double this and have 8 per cent of the GDP for physical infrastructure. This should be maintained for the next 10 years to sustain an eight per cent economic growth," he said.