Kamal Nath makes case for job-generating FDI

NEW DELHI: The government welcomes foreign direct investment (FDI), but investments for mere acquisitions do not excite it. Investment in trading operations would, however, be viewed rather positively, as it leads to economic activity.

This was stated by commerce and industry minister Mr Kamal Nath in his address today at a luncheon meeting “Celebrating Indian Investment in the UK� in London.

“Foreign investors would find a very conducive atmosphere in India. While all kinds of FDI is always welcome, our very comfortable foreign exchange reserves means that investment for mere acquisitions do not excite us. What we really want is FDI that generates the maximum economic activity, and thereby generates employment, that creates wealth for our people,� the minister said.

“Employment generation was a central election promise of ours. We especially therefore look to FDI in manufacturing sectors and in greenfield projects�.

The age of the Indian MNC has now dawned, with the Indian industry realising that worldwide, businesses can thrive today only by crossing new frontiers, creating new markets and building new partnerships, the minister said.

The very theme of the gathering symbolised the transformation of the UK-India commercial links over the years and the new economic paradigm of two-way investments, which was emerging, he said.

Pointing out that India’s two-way international trade stands at $150 billion and foreign exchange reserves of the country are a comfortable $120 billion, Mr Nath indicated that “the value of overseas acquisitions by Indian firms leap-frogged in the first half of 2004, with 24 buyoffs valued at a billion dollars, or roughly double the size of all of last year’s acquisitions.

Indian companies are investing heavily in different parts of the world, including Germany, the United States, Australia, China, Korea, Thailand, Singapore and many parts of Africa.