Foreign direct investment (FDI) in India leapt 41.5% in the financial year 2005-06, figures released April 29 showed, but the sum was paltry compared with funds pumped into China.
FDI rose to US$7.5 billion in the 12 months ended March 2006 from $5.3 billion a year earlier, Trade Minister Kamal Nath announced. In contrast, China drew $60.3 billion in FDI during calendar year 2005 and $14.25 billion in the first three months of 2006.
Nath said that further loosening of investment policy should boost foreign investment flows into India whose economy is growing at around 8%, making it the second-fastest growing major economy in the world after China's. Inflows during the fiscal year to March 2007 were expected to cross $10 billion, he said in a statement.
"Liberalization of FDI policy is expected to attract large FDI inflows in development of infrastructure ... greenfield investment in manufacturing and in projects having potential for creating employment opportunities," Nath said.
A government document released earlier this year said India has the potential to absorb $150 billion in FDI by 2010 in the infrastructure sector alone.
Copyright Agence France-Presse, 2006
