FDI from US to cross $1 bn by March 31

Tuesday, 06 March 2007, 18:30 IST
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New Delhi: Foreign direct investment (FDI) from the United States is expected to exceed $1 billion by the end of the current fiscal year ending March 31, said US ambassador to India David C. Mulford. "While the US has been India's largest single foreign investor over the past ten years, foreign direct investment (FDI) levels themselves have tended to run at the rather modest level of $300-400 million a year," Mulford said, speaking at the second annual conference on 'Indo-US Economic Cooperation: Developing a Strategy for Closer Partnership' organised by the Confederation of Indian Industry (CII) and the US-India Business Council (USIBC) here. He, however, added, "For the full year ending March 31, we expect the figure to exceed $1 billion and before long - considering the announced investment plans of US companies - to eclipse the total US FDI base in 2005 which stood at only $8.5 billion." This escalating investment in India reflects the recognition among US investors that the entrepreneurial and innovative talent in India that leverages US technology transfer and business management skills is an important part of their global strategies, the ambassador said. Referring to the recent mega acquisitions made by Indian companies abroad like Tata Steel buying the Anglo-Dutch company Corus, Mulford said, "Perhaps it also indicates that Indian firms see better opportunities outside their country than inside at this moment in time - an important signal to India's leadership." He said that the in the first six weeks of 2007 alone, India-targeted mergers and acquisitions (M&As) hit $21 billion, the largest in Asia and more than double China's overseas M&A activity to date of $9.7 billion. The ambassador also said that improving India's agricultural productivity and its agricultural produce markets is one of the key areas for focusing Indo-US intellectual and technical collaboration, through the US-India Agricultural Knowledge Initiative. "Remember, India is the world's largest producer of milk and livestock, the second largest of fruits and vegetables, the third largest of food grains and the fifth largest of eggs. Yet, processed foods account for only a negligible part of this production - merely two percent of fruits and vegetables, for example," he said. He said that this potential, combined with that in large-scale organised retail, afforded multiples of gain, because significant business infrastructure investment will be made by private investors back to farm. Mulford also mentioned India's implementation of forward looking policies that will ultimately transform India, bring its economy more firmly into the global system, and provide rising prosperity for its people.
Source: IANS