'FDI needed in greenfield projects'

LONDON: The government on Monday said it was keen on promoting foreign direct investment in manufacturing and greenfield projects that create maximum economic activity and generate employment.

"What we really want is FDI that generates maximum economic activity and thereby greater employment that creates wealth for our people," Commerce and Industry Minister Kamal Nath said here.

"Employment generation was the central election promise of ours. We therefore look to FDI in manufacturing sector and greenfield projects," he said addressing businessmen at the ''Celebrating Indian Investment in the UK'' meet.

He said, "While all kinds of FDI is always welcome, our comfortable foreign exchange reserves mean that investment for mere acquisition do not excite us. Investment in trading operations is slightly better as it leads to economic activity."

The Minister said the age of Indian MNC has now dawned and value of overseas acquisitions by Indian firms leap-frogged in the first half of 2004 with 24 buyouts valued at one billion dollars or roughly double the value of last year''s acquisitions.

He said Indian investments in UK now roughly equal British investments in India.

Nath said there has been some big-ticket investment by Indian companies in the UK last year that has created many local jobs and saved jobs in some cases.

Appreciating UK government''s pragmatic approach to outsourcing, he said, "existing Indian companies have ramped up their operations significantly and at least two of them employ over 1,000 people each