FDI's are down as recession re-emerges from Europe

Foreign direct investment in India dipped for the second month in a row in April to $2.21 billion, down 5.1 per cent over the year-ago period.

In March, the inflows had contracted by about 38 per cent to $1.2 billion. The inflows in the first three months of 2010 were $4.96 billion, down 20 per cent from $6.17 billion in the corresponding period last year.

Foreign Direct Investment down 11 percent

Foreign direct investment (FDI) into India fell 11 percent on year to $15.3 billion in the first six months of fiscal 2009/10, the trade minister said, as the global financial downturn clipped flows. India had received $17.2 billion in FDI in the corresponding period last year

FDI to remain robust - Goldman Sachs

The global economic slowdown will not affect the foreign direct investment (FDI) flow to India as the domestic demand remains "resilient", investment banker Goldman sachs said on Monday.

"FDI is showing positive signals," Tushar Poddar, an economist with Goldman Sachs said, adding: "We expect FDI inflows to remain significant in 2009-10, given India's relatively resilient domestic demand momentum."

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According to the bank, the FDI flow to India during September-January - the months when the credit crisis was at its peak - amounted to $9.2 billion, higher than $7.9 billion in the corresponding period last year.

Pranjul Bhandari, another economist at Goldman, said: "India's balance of payments (BOP) may have had its worst quarter in October-December 2009, when it showed a deficit of $18 billion."

"NRI deposits showed an uptick last fiscal, but we expect it to remain flat in 2009-10. We expect NRI deposits coming due in the next year ($32 billion) to get rolled over to a large extent, but do not expect large fresh inflows," he added.

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External commercial borrowings (ECBs) are expected to moderate in in the current fiscal. Although ECBs have slowed to $9.1 billion during September-February from $11.8 billion in the previous six months.

"In 2009-10, we expect ECBs to remain positive due to higher growth and yields in India, notwithstanding the $7 billion of outstanding commercial loans coming due," Bhandari said.

Private remittances from Indians working abroad slowed to $4.3 billion in the October-December quarter from $7.9 billion in the July-September quarter.

"We expect this to remain weak, but do not expect much further weakness from current levels," she said.

Bhandari added that the merchandise trade deficit had fallen to $5 billion in February from a peak of $14 billion in August.

Posted under - FDI in india, indian economy updates, economy of india, recession and indian economy, Indian FDI, foreign direct investment in india, India FDI, FDI updates
source - www.economictimes.com

Indian Government gives green signal to 34 FDI proposals

The government has cleared 34 Foreign Direct Investment (FDI) proposals worth about Rs 1,615 crore of firms like Mahindra and Mahindra, Sumitomo Corporation, and Barwah International from Qatar.

The largest investment proposals are in urban development, by HBS Realtors Mumbai, which intends to invest Rs 300 crore to convert the operating company into a operating-cum-holding company and Qatar-based Barwa International, which would invest Rs 400 crore.

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Besides, Sumitomo Corporation from Japan would invest Rs 160 crore, but its proposal would be subject to norms laid down in Press Note one, the government said.

Meanwhile, another proposal from Universal Biofuels for an investment of Rs 200 crore was cleared, and it would incorporate and make downstream investment
in subsidiaries and also issue and allot equity.

posted under - Indian economy updates, economy of india, indian govt steps, indian economy blog, economy of india, indian FDI updates.