By PTI

Mumbai: India is fast catching up with China in the flow of Foreign Direct Investment as it crossed $10 billion in the first quarter of this fiscal.

Foreign Direct Investment (FDI) in the first quarter of FY 09 has far exceeded the total FDIs flows received by the domestic economy in the financial year 2005-06, Reserve Bank data said.

The total FDI inflows into the country in the April-June period amounted to $10.073 billion, nearly one billion more than the total FDI inflows--$8.961 billion, reached in the 2005-06 period, RBI said in its August report.

The FDI flow into India was less than $10 billion annually until 2005-06. It shot up to $22 billion in 2006-07 and $32 billion in 2007-08. China averaged $50 billion annually in the past decade.

If the first quarter trend continued, India could cross this fiscal $40 billion mark in FDI annual inflow for the first time.

FDI flows, during April-June, almost doubled when compared to the same quarter of FY 08, $5 billion. Of the total FDIs reached here in the April-June period this fiscal, around $2.253 billion was on account of the acquisition of shares of Indian companies by foreign entities, RBI said.

While the momentum in the foreign direct investment is expected to continue in the remaing part of FY 09 on the back of a strong domestic demand, the pace of the growth may be a little lower compared to the preceeding months, RBI said.