Foreign direct investment (FDI) into India has seemed like a trickle when compared with the flood pouring into China. This has been a bit of a sore point for very long.
The balance is now being corrected. The latest FDI data should gladden many hearts. Inflows during 2007-08 were $24.57 billion, a great deal higher than the $15.7 billion that came in during 2006-07, and the sub-$10 billion that has usually come in during the past decade.
China still gets far more foreign investment—around $70 billion a year. But its definition of FDI includes reinvested dividends. If India were to include those, then the FDI that we get would top the $30 billion mark. That closes the gap a bit. Also, one has to remember that China has an economy that is twice as big as that of India. So, when compared as a proportion of GDP, the two countries get similar amounts of FDI now. It’s a sure indicator that India continues to be a favoured destination.
And that’s good news.