The Foreign Direct Investment (FDI) in the country has turned down by 26 per cent in October this year as a result of the global economic slowdown. The FDI inflows during April-September 2008 showed an increasing trend each month in comparison to the same period in the previous year, Union Commerce Minister Kamal Nath informed the Lok Sabha in a written reply on Dec 16. However, the trend changed in October when it fell by 26 per cent, he said, adding that it would be difficult to assess whether the ongoing projects in India would be affected. Quoting various studies by international agencies and analysis, he cautioned that FDI flows to developing nations would generally decline.
Under the liberalized economic environment, investment decisions are based on the macro-economic policy framework, investment climate in the host country, investment policies of the trans-national corporation and other commercial considerations, he said. The Minister, however, said the government had put in place a liberal and investor-friendly policy on FDI under which investment up to 100 per cent was permitted on the automatic route in most sectors/activities. A slew of initiatives to encourage demand had been taken and this would enable India to continue as an attractive investment destination, Mr. Nath said.
Under the liberalized economic environment, investment decisions are based on the macro-economic policy framework, investment climate in the host country, investment policies of the trans-national corporation and other commercial considerations, he said. The Minister, however, said the government had put in place a liberal and investor-friendly policy on FDI under which investment up to 100 per cent was permitted on the automatic route in most sectors/activities. A slew of initiatives to encourage demand had been taken and this would enable India to continue as an attractive investment destination, Mr. Nath said.
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