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Increase in foreign investments shows faith in Indian story

BS Banking Bureau in Mumbai

Foreign investment flows into India rose by 16.19 per cent to $5.925 billion in 2001-02 as against $5.099 billion in 2000-01.

This is indicative of the growing confidence of global investors in the Indian economy, the Reserve Bank of India said in its annual report.

While inflows under foreign direct investment increased by 67 per cent in 2001-02 to $3.904 billion ($2.339 billion in 2000-01), thereby surpassing the previous peak of $3.6 billion achieved in 1997-98, there was a 27 per cent decline in portfolio investment flows to $2.021 billion ($ 2.760 billion).

Under the FDI category, inflows on account of the Secretariat of Industrial Approvals/ Foreign Investment Promotion Board sub-category stood at $2.221 billion ($1.456 billion); through RBI at $767 million ($454 million); non-resident Indians $35 billion ($67 billion); and acquisition of shares of Indian companies by non-residents under Section 5 of Fema $ 881 million ($ 362 million).

Under the portfolio investment category, inflows on account of global depository receipts/ American depositary receipts was at $477 million ($831 million); foreign institutional investors $1.505 billion ($1.847 billion) and offshore funds and others $39 million ($82 million).

The source and direction of FDI flows remained, by and large, unchanged during the 1990s. Companies registered in Mauritius and the United States were the principal sources of FDI in India during 2001-02.

The bulk of FDI was channelled into services, electronics and electrical equipment, computers (hardware and software) and engineering industries.

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RBI Annual Report 2001-02
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