Govt steps up efforts to attract Foreign Direct Investors (FDI)

(posted under - FDI updates - Economy updates) - Transport Minister Kamal Nath had said all impediments would be removed to get foreign investment in the roads and highways sector.

He added that the roads sector is expected to attract USD 10 billion of FDI in the next two years.

The government is also making efforts to bring in foreign investment in the textiles sector, the largest employer after agriculture in the country.

Textiles Minister Dayanidhi Maran had led a business delegation to Japan last month to woo foreign investors in the labour intensive sector.

FDI inflow in January-May period of 2009 was USD 10.58 billion compared to USD 19.56 billion in the same period previous year, a dip of 46 per cent.

The government also proposes to raise the FDI cap in private insurance firms from 26 to 49 per cent and a bill to give effect to the proposal is pending in the Rajya Sabha.

CRISIL Principal economist D K Joshi said by taking the steps government is building pipeline to attract FDI.

Economic growth drivers moderating - RBI

Major drivers of growth in India are witnessing moderation and various surveys of economic activity point towards less-than-optimistic
sentiment for the economy in coming months, the Reserve Bank of India (RBI) said on Monday.

The survey of professional forecasters conducted by the Reserve Bank of India cut gross domestic product estimates for the 2009/10 fiscal year to 5.7 percent from 6.0 percent, it said in a review of the economy.

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The central bank said the slew of measures taken by it and the government would help tame the moderation in growth and revive consumption and investment demand.

Economy Updates - Exports down 18% to $12 bn in March 2009

April 7/09(India Economy Updates) - The country seems all set to miss the pared down export target for 2008-09 with exports recording a fall in March 2009, for the sixth time in a row. Quick estimates made by the commerce department reveal that exports fell by 18% in March 2009 to $12 billion.

The aggregate export figure for the entire fiscal is, therefore, at $168.59 billion, which is more than a billion dollar short of the lower range of the revised target of $170-175 billion set by the government. The unofficial quick estimates, however, are sometimes quite different from the revised estimates officially issued at the end of the month.

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While desegregated figures are not available, a government official said that sectors such as textiles, handicrafts, carpets, leather, gems & jewellery and marine products continued to do badly. While demand for some of these products, especially textiles, has started picking up slightly in the EU market, demand from the US continues to be sluggish, the official added.

India exported goods worth $162 billion in 2008-09 registering a healthy growth over the previous fiscal. The 2008-09 fiscal began on a robust note with exports growing by more than 30% in the first six months. While the effects of the global demand slowdown started appearing in September with export growth slowing down to 10% in September 2008, the downslide started in October 2008 with exports entering the negative territory with a fall of 12.8% over October 2007.

Exports have not managed to get out of the negative zone ever since. Commerce and industry minister Kamal Nath, who had initially fixed the export target for 2008-2009 at $200 billion, brought it down to $170 billion-$175 billion in the last quarter of the fiscal year.

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With demand in key markets including the US, the EU and Japan slowing down, exports in most countries have been hit.

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