Peugeot’s Drive Into Gujarat Will Boost State’s FDI Figures .

With the signing of memorandum of understanding (MoU) with French carmaker PSA Peugeot Citroen on Thursday, the Gujarat government will add a major chunk to its kitty of foreign direct investment (FDI) in the state. It is believed that after Ford, getting Peugeot to set up its manufacturing facility in the state will give a major fillip to FDI figures.

Sources close to the development said that Peugeot will be investing around Rs4,000 crore in the state to set up its manufacturing facility and the production is expected to start by the year 2014-15.

At the same time, Ford, which has also signed an MoU with the state government for setting up its production facility in Gujarat will also start rolling out cars by 2014.

A top official in the state industry department agreed that the project will add significantly to the FDI investment in the state.

“The project cost of Peugeot is more than Rs4,000 crore, which means the company would be investing this much money, till the completion of the project. This will definitely boost the FDI investment in the state,” said the official.

If above investment alone are taken into consideration, then total amount of investment that would be made by both these companies in next 3 years will be around Rs8,000 crore in the state.

Another official said, “There would mean a combined average investment of Rs2,666 crore per year by both Ford and Peugeot in the state for next three years.”

According to the statistics released by the Union industry ministry, Gujarat had attracted $724 million (Rs3,294 crore) of FDI in the year 2010-11.

“Now with two big automakers entering the state with huge investment proposals, the state’s FDI share will definitely make a big stride forward compared to the year 2010-11,” said official.

Source : dnaindia.com