FDI inflows to treble to $11.4 bn

NEW DELHI: Foreign Direct Investment inflows into India more than trebled to $11.4 billion in the first six months of 2007 as companies such as UK's Vodafone poured funds to tap the world's second-fastest growing economy.

Inflows for the first quarter of financial year 2007-08 went up by 185 per cent to $4.9 billion from $1.7 billion received during April-June last year. During January-June 2007, inflows rose 216 per cent compared to $3.6 billion in the corresponding period last year.

"This is a huge jump. The most important thing is that these are largely first-mile investments and are obviously going to grow in geometrical proportions," Commerce and Industry Minister Kamal Nath told reporters on Friday.

He said India remains a favourite destination of FDI "despite what is going on in the stock market".

Domestic bourses have fallen in the past few days in line with the global trend as the US housing loan crisis spread.

Vodafone, the world's biggest mobile operator, topped the list of foreign investors bringing in $801 million. It was followed by Matsushita Electric Works of Japan with $342 million. The British firm acquired controlling stake in the operator Hutch-Essar early this year, while the Japanese company bought Anchor Electricals. GA Global Investments Ltd was the third largest investor.

Nath said the country had received $15.7 billion FDI in 2006-07 as compared to $5.5 billion a year ago. "If reinvested earnings and other capital inflows are included, total inflows in 2006-07 add up to $19.5 billion compared to $7.7 billion in 2005-06," he said.

Nath has in the past said that India could get an estimated $25-30 billion of FDI in 2007-08. Tax haven Mauritious remained the biggest route for FDI into India. Other major countries investing into Indian businesses were Japan, Cyprus, the US and Singapore.

Services, telecom, electrical equipment, real estate and transportation were the five major sectors receiving FDI inflows so far this year.

Delhi region received the maximum inflows of $1.3 billion, accounting for 36 per cent of the total FDI up to May 2007. If Mumbai, Bangalore and Chennai were added to the list of regions, they accounted for two-third of the total inflows into the country.