Dua: Happy

Mumbai, May 29: Close to $30 billion could come into India as foreign direct investment during this fiscal — almost 58 per cent higher than last year’s $19 billion.

The Centre, however, does not want to take any chances. Even as more foreign investment is making its way to India, the government is reviewing the FDI policy and the changes will be announced in a month or two, said Ajay Dua, secretary in the department of industrial policy & promotion, ministry of commerce and industry.

Dua was speaking at the plenary session of the third meeting of the India-GCC Industrial Forum here today. “The results of the review will be in favour of liberalisation, as was the case with similar policy reviews in the past,” he added.

Dua said there were six sectors which held enormous potential for FDI. These included automobiles and auto ancillaries, information technology and IT enabled services, pharmaceuticals, biotechnology, food processing and telecommunications.

FDI in the telecom sector is already rising, he said. He added that factors like cost-competitiveness, supply side strengths, including a large intellectual capital base, and the expanding domestic market would play a major role in economic growth.

According to the Reserve Bank, foreign equity inflows into India till January 2007 amounted to about $16.4 billion.

“With the addition of re-invested earnings, FDI inflows have been healthy during the year. In 2007, we expect about $25 billion of FDI inflows would be through equity,” he added.

The third meeting of the India-GCC Industrial Forum is being held at a time when an appreciation in the value of the rupee is hitting exporters hard.

The Indian currency today closed at a nine-year peak of 40.50 per dollar.

Responding to exporters’ concerns regarding the rise of the rupee during the past couple of months, commerce minister Kamal Nath said the government was looking at providing tax incentives and sops for labour intensive export companies.

Nath, however, did not elaborate on the measures that the Centre was contemplating.

“We are looking at refunding the levies and taxes on labour intensive export units and those sectors which have little or no import component. A rising rupee is attributed to several global factors,” Nath added.