FDI surpasses $10 Billion in the First Quarter

FDI in the first quarter of the financial year 2009 has far exceeded the total FDI flows received by the domestic economy in 2005-06, Reserve Bank of India's data said.The total FDI inflows into the country in the April-June period amounted to $10.073 billion, nearly one billion more than the total FDI inflows--$8.961 billion-- in the 2005-06 period, RBI said in its August report.
The FDI flow into India was less than $10 billion annually until 2005-06. It shot up to $22 billion in 2006-07 and $32 billion in 2007-08. China has averaged $ 50 billion annually in the past decade. If the first quarter trend continues, India could cross this fiscal $40 billion mark in FDI annual inflow for the first time. FDI flows, during April -June, has doubled when compared to the same quarter of financialyear 2008, $5 billion.
Of the total FDIs reached here in the April-June period this fiscal, around $2.253 billion was on account of the acquisition of shares of Indian companies by foreign entities, the RBI said.
While the momentum in the foreign direct investment is expected to continue in the remaining part of financial year 2009 on the back of a strong domestic demand, the pace of the growth may be a little lower compared to the preceding months, the RBI said. "The private corporate investment in 2008-09 is likely to increase, although it may grow at a slower pace. Corporate's incentives to invest are likely to remain strong in 2008-2009, namely high domestic demand and high capacity utilisation rates amidst improved profitability of last few years," the apex bank added.
The country received a record $11.9 billion FDI in the final quarter of last financial year and has continued the momentum despite the choppy market conditions in some of the major economies in the first quarter on the back of a strong domestic demand for various projects.
According to the Reserve Bank's estimates, total FDI in the first six months of the current calender year aggregated to $21.948 billion, close to a $22.079 mark routed to the domestic market by foreign direct investors in 2006-07.
Meanwhile, FIIs sold a total of $ 5.177 billion in the April-June period, much above as compared to a $4.1 billion in Q4 financial year 2009, the RBI said.
Total FII inflows in financial year 2008 stood at $20.328 billion while other investors including offshore funds put in $298 million during the period. However, in the current fiscal, except in January, FIIs sold nearly $15.811 billion, so far, RBI data showed. In January, the country received an FII inflow of 6.49 billion.