New Delhi: The global economic slowdown has taken its toll on the foreign investment flows in the country as FDI has declined by a whopping 26% during the month of October this year over the same month a year ago.
“Foreign Direct Investment (FDI) inflows during April-September 2008 showed an increasing trend each month in comparison to the same period in the previous year,” Union Commerce Minister Kamal Nath informed the Lok Sabha in a written reply.
However, the trend was reversed during the month of October when it fell by 26%, he said.
To a question that whether the ongoing projects in India would be affected due to worldwide slowdown, the Minister said it was difficult to assess the impact.
Quoting various studies by international agencies and analysis, he also cautioned that the FDI flows to the developing nations would generally decline.
Under the liberalised economic environment, investment decision of investors are based on the macro-economic policy framework, investment climate climate in the host country, investment policies of the transnational corporation and other commercial considerations, he said.
The Minister, however, said that the government has put in place a liberal and investor-friendly policy on FDI under which FDI up to 100% is permitted on the automatic route in most sectors/activities.
The government has taken a slew of initiatives to accelerate the demand in the economy which would enable India to continue as an attractive investment destination, Nath said.