FDI jumps in June

Foreign direct investment (FDI) into the country rose over four times in June to reach $5.65 billion, compared to $1.38 billion a year ago. Though the department of industrial policy and promotion did not provide any details, in recent months, there has been a sharp rise in inflows, partly due to several projects in the pipeline materializing as also due to the low base of last year when inflows had declined significantly. “The figures indicate that the trend of high FDI equity inflows since the beginning of the present financial year is being maintained,” an official statement said. The government, which has been trying to dismiss suggestions of policy paralysis, would be emboldened by this. FDI inflows were also very high in May 2011, estimated at $4.66 billion, which was double the level witnessed in May 2010. If approvals are an indication of things, the story looks good considering that the government just approved a $7 billion stake acquisition by BP in Reliance Industries Ltd’s oil and gas acreages. This deal could translate into further inflows on account of proposed investments. Further, the government has cleared the much-delayed Posco steel project in Orissa, where investment could be of the order of $13 billion. During April-June 2011, FDI inflows more than doubled to $13.44 billion from $5.77 billion in the first quarter of the last financial year, according to data compiled by the government.