New Delhi: With India allowing FDI up to 100% in many sectors, power, petroleum and natural gas, services, construction and real estate have emerged as the preferred destinations for foreign investors, who have pumped in $20.8 billion in these areas in the last four years.
Between 2004-05 and 2007-08, FDI in services leapfrogged to $6.61 billion from $444 million, an government statement said.
The real estate sector which was thrown open in 2004-05 saw FDI picking up slowly in the initial two years, but grew substantially in 2007-08 to $2.17 billion.
While inflows registered an over 18-fold rise in the power sector, the inflows are yet to touch one billion dollars and were at $967 million in 2007-08. It was one of the sectors which was late in attracting attention of foreign investors, thanks to the lack of clarity in policy both at the Central and state levels.
“FDI is a means to supplement domestic investment for achieving higher level of economic development and providing opportunities for technological upgradation as well as access to global managerial skills and practices,” Commerce and Industry Minister Kamal Nath said.
The petroleum and natural gas sector witnessed FDI inflows of $113 million in 2004-05, which plunged to a mere $14 million in the succeeding fiscal.
But the sector gradually emerged as one of the preferred destinations, with inflows increasing a whopping 100-fold to touch $1.42 billion in 2007-08.
FDI inflows in the construction sector too saw a huge jump from $151 million between 2005-06 and 2006-07 and crossed one billion dollars in 2007-08.
While inflows in the computer software and hardware sector grew from $539 million in 2004-05 to $2.61 billion in 2006-07, the inflows declined to $1.41 billion in 2007-08.
The telecom sector witnesses FDI inflows grow from $125 million in 2004-05 to $1.26 billion in 2007-08, with Vodafone’s acquisition of Hutch-Essar being the big-ticket FDI deal.
However, investments in the telecom and chemicals sectors saw a slump between 2005-06 and 2006-07.
India’s automobile industry, metallurgical and chemicals sectors also witnessed a steady flow of foreign investments during the last four years.
The government has eased FDI norms for a host of sectors, but has kept areas such as retail, (except single brand retailing), atomic energy, lottery, gambling and betting, business of chit fund and trading in Transferable Development Rights (TDRs) out of the ambit of foreign investors.
It had allowed 100% FDI in sectors such as titanium mining, maintenance, repair and overhauling facilities for aircraft.