India bullish on FDI

Undeterred by global credit freeze, India maintains a bullish outlook on attracting Foreign Direct Investment which may be governed by easier rules, a top government official said on Wednesday.

"FDI inflows were robust till September and...my sense is that the October figures will be robust as companies like the General Motors, Volkswagen and Toyota are going to execute their ongoing projects," Department of Industrial Policy and Promotion (DIPP) Secretary Ajay Shankar said here.

He said the issue of "liberalisation and rationalisation" of FDI policy was under inter-ministerial consultation. "A decision is expected soon", he said at a FICCI function here.

An empowered Group of Ministers, headed by External Affairs Minister Pranab Mukherjee, is likely to meet soon to discuss a proposal to exclude foreign institutional investors' stake from the overall FDI ceiling.

Despite slowdown in the global economy, India received 17.21 billion dollar between April-September this financial year, showing an impressive increase of 137 per cent from 7.25 billion dollar in the first half of the previous fiscal.

While the DIPP is understood to have mooted the proposal for excluding the foreign institutional investors' stake in companies from the overall FDI ceiling, the plan is believed to have been opposed by the Finance Ministry and the Ministry of Corporate Affairs. The issue will be resolved by eGoM.

Between April-August, data for which has been officially released, manufacturing has attracted an FDI of five billion dollar, showing an increase of 41 per cent over inflows in the year-ago period.

Asked whether the government is mulling import restrictions to protect the domestic industry, Shankar said both fiscal and monetary measures would be used to stimulate demand and maintain growth.