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FDI Inflows soar 112% in April to $3.6 billion; Singapore is the top investing country |
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NEW DELHI: Foreign direct investment inflows into India surged 112% in April to $3.6 billion from $1.7 billion in the year-ago period. The increase was 71% over the inflows in the previous month.
The Department of Industrial Policy and Promotion ( DIPP) secretary Amitabh Kant told ET that he is confident that the country will receive record capital flows in the current fiscal owing to the slew of measures being undertaken by the government to make India an easier place to do business. In absolute terms, April saw the second highest FDI inflows in the last one-and-a -half years, with only January posting a higher figure of $4.4 billion, which was 109% more than that in January 2014.
"The April FDI number is very encouraging. We are confident that the inflows will only go up in the coming few months, with more measures expected to improve business environment in the country," said Kant.
"The April FDI number is very encouraging. We are confident that the inflows will only go up in the coming few months, with more measures expected to improve business environment in the country," said Kant. Prime Minister Narendra Modi's thrust to boost domestic manufacturing was visible as the sector posted a 142% growth ($1.06 billion) in FDI while the inflows in the nonmanufacturing sector went up 93% ($2.05 billion).
The data released by the Central Statistics Office released last week showed that industrial activity picked up in April, posting a better than expected 4.1% growth, higher than 2.5% expansion in the previous month,indicating the gradual pickup in manufacturing. The automobile industry was the second highest FDI attractor after the computer software and hardware industry, with 18% increase to $0.65 billion. Construction and infrastructure sector saw 7% growth in FDI at $0.2 billion during the month.
Singapore was the top investing country in April, followed by Mauritius, United States, the Netherlands and Germany, all of which together accounted for indiabout 85% of the total inflows.
In the past few months, the government has liberalised the FDI regime in sectors including medical devices, construction, railways, defence and insurance. Since the beginning of 2015, FDI has grown 43%, with inflows of about $13 billion. In 2014-15 India saw 27% growth in FDI inflows over the previous year. Last month, the Cabinet allowed non-repatriable investments by non-resident Indians to be considered on a par with domestic funding, to encourage capital inflows in manufacturing and infrastructure.
Mumbai, Bengaluru, New Delhi, Chennai and Ahmedabad were the top five cities, accounting for about 90% of total inflows. The 'Make in India' campaign, launched in September 2014, aims to promote domestic production and increase the share of manufacturing to 25% of GDP by 2022 from 17% at present.
India slipped two spots to 142 in the World Bank's ease of doing business ranking in 2015 out of 189 countries, but the government is trying to dramatically improve the country's ranking to the top 50 in the next few years.
The government's efforts to enhance ease of doing business in the past few months include withdrawal of requirement of minimum paid-up capital and common seal for companies, allowing single step incorporation of companies through the INC-29 form and integration of 14 government services on an online single window portal called eBiz.
Besides, it has made cross-border trade easier by cutting the number of forms for export and import to three from seven and nine respectively. Department of Industrial Policy and Promotion will come out with the ease of doing business rankings for the states in the next two months.
It will rank states on seven different parameters, including setting up of a business, allotment of land and obtaining construction permit, complying with labour regulations and environment procedures, and obtaining infrastructure related utilities.
Source : economictimes.indiatimes.com
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