FDI inflows scrape 15-mth bottom of $1 bn

MUMBAI: It was a disappointing November as far as foreign direct investments (FDI) into the country was concerned. FDI in November 2008 hit a 15-month low of $1 billion, nearly 42% less than what was recorded in the same month a year ago. On a month-on-month basis too, the FDI inflows in November 2008 were 26% less than in October 2008.

However, the November dip should be seen in the context of one of the worst credit crunch situations the world has seen. Things were no better in China. FDI inflows into that country fell 36.5% in November 2008 over the same month the previous year. China recorded FDI worth $92 billion in 2008 while India received $30 billion.

India expects FDI inflows of $35 billion in 2008-09 . As of November last, FDI inflows since April have touched $23 billion. This is significantly higher than the inflows reported in the same period a year ago. If market sources are to be believed, there are $10 billion worth of private equity investment proposals pending with the Reserve Bank of India. Of late, private equity has been emerging as a significant component of FDI inflows.

On the positive side, CEOs of multinational companies are professing their commitments to India, Satyam fiasco notwithstanding. Once MNCs step up their investment plans, the FDI number could jump, say market sources.

DOLLAR DREAMS

On a sequential basis, FDI inflows in Nov 2008 were 26% less than in Oct 2008. The Nov dip should be seen in the context of one of the worst credit crunch situations. FDI inflows into China also fell 36.5% in Nov 2008 over the same month the previous year.