India's record exports, foreign equity inflows in 2006

Wednesday, 27 December 2006, 06:00 Hrs
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New Delhi: In a landmark year for India's external sector, foreign direct investment (FDI) inflows are all set to cross $10 billion and merchandise exports have topped $100 billion, Commerce Minister Kamal Nath said on Wednesday.

"Continuous liberalization of our FDI policies and simplification of procedures are contributing immensely to attracting increased FDI into India," Kamal Nath said in a statement, giving an overview of the country's external sector.

"The year also witnessed an unprecedented growth in India's merchandise exports, which crossed the landmark figure of $100 billion to reach $103 billion," the minister added.

"The high rate of growth in 2006 will ensure our export target of $125 billion for this fiscal will be reached," Kamal Nath said, adding exports during the period between April and November had reached $80 billion with a growth rate of about 39 percent.

Quoting a study commissioned by the think tank Research and Information Systems for Developing Countries, Kamal Nath said the export sector created additional jobs for close to 1.5 million people directly.

With this, he added, the total employment generated by the export sector rose to nine million. "India has set itself an export target of $150 billion by 2008-09 and achievement of this target is likely to generate 13.6 million new jobs."

Speaking about foreign investment, Kamal Nath said equity inflows alone during 2006-07 were expected to cross $11 billion - more than double the inflows of $5.5 billion last fiscal.

"Once reinvested earnings of foreign companies present in India are also taken into account - which is the worldwide practice - the FDI inflows in 2006-07 could be as high as $14 billion, compared to $7.7 billion last year," he said.

"There have been huge investments coming into software, financial services and manufacturing. The manufacturing investments are the first mile investments as these are likely to be followed up by more investments to complete projects."

According to Kamal Nath, following the notification of the Special Economic Zone Act of 2005 and the modification of rules in February, 237 such zones had been formally approved and 51 others notified during 2006.

He listed as a success story Nokia's special economic zone (SEZ) in Tamil Nadu with an investment of $100 million, that is providing direct jobs to 2,800 people and indirect employment to some 10,000.

The other success stories included the Apache SEZ of the Adidas Group in Andhra Pradesh, which commenced construction activities with an investment $50 million and the Quark City SEZ in Chandigarh with an investment of $500 million.
Source: IANS
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