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India's Outward Foreign Direct Investment

As an outcome of liberalization policies, India's outward foreign direct investment witnessed an unprecedented rise in recent period. India's overseas investments that began with Information Technology and related services sectotrs has over the years spread to wider areas like manufacturing and financial and non-financial areas. According to a Reserve Bank of India report, number of proposals approved for outward FDI from India in joint ventures and WOSs increased from 1214 in 2003-04 to 1817 in 2006-07. The amount fo approved proposals increased from $ 1466 million in 2003-04 to $ 15060 million in 2006-07.

APPROVED PROPOSALS (In US$ Million) 


Year

No. of proposals

Amount of approved proposals

 

Equity

Loan

Guarantee

Total

2003-04

1214

822.40

229.90

413.83

1466.13

2004-05

1281

2010.03

384.39

409.91

2804.33

2005-06

1395

1887.78

629.74

337.32

2854.84

2006-07

1817

11244.96

1475.28

2339.76

15060.00

Apr.-Dec. 2007

1595

11324.99

1331.77

5780.50

18437.26

Apr.-Dec. 2006

1268

4594.09

1270.70

2079.75

7944.54

SOURCE: Reserve bank of India report, April 2008

The amount of outward FDI from India on account  of JVs/WOSs, according to the RBI report, increased from $ 1495 million in 2003-04 to $ 12880 million in 2006-07. Equity accounted for 90 percent of the total investments and the remaining 10 percent by way of loans in 2006-07. Inflows from India's outward FDI are in the form of dividend, royalty, license fee, brand fee, technical knowhow fee, repayment of loans etc. During 2006-07 total inflows from outward FDI amounted to $ 295 million.

ACTUAL OUTFLOWS (In US$ Million)

Year

Equity*

Loan

Guarantee Invoked

Total

2003-04

1234.25

260.93

-

1495.18

2004-05

1365.59

402.79

-

1768.38

2005-06

3858.46

1008.10

3.00

4869.56

2006-07

11599.01

1281.07

-

12880.08

2007-08 (April-December)

9096.50

1017.72

-

10114.22

2006-07 (April-December)

8097.27

876.07

-

8973.34


* The equity data do not include equity of individuals and banks. Figures are provisional

SOURCE: Reserve Bank of India

 

INFLOWS FROM INDIA'S OUTWARD FDI (In US$ Million)

Year

Dividend

Others@

Total

2006-07

21.96

272.75

294.71

2007-08 (April-December)

29.41

307.68

337.09

2006-07 (April-December)

20.15

274.33

294.48

@ Others include dividend, royalty, licence fee, brand fee, technical know-how fee, repayment of loan, etc.

Figures are provisional


SOURCE: Reserve Bank of India

The sectoral pattern of outward FDI is led by manufacturing during first nine months of fiscal 2007-08 with $ 7634 million followed by non-finacial services' $ 1677.71 million and $ 620.48 milliion. Of the total investmemnts 96 percent were of large investments (4 5 million and above). Sectorwise 43 percent were bin manufacturing folowed by non-fimnancfinancial services ( 10 percent) and ytrading ( 4 percent).

SECTORAL PATTERN OF OUTWARD FDI DURING APRIL-DECEMBER 2007
(In US$ Million)

Sector

Month

Total Approvals

April

May

June

July

Aug.

Sept.

Oct.

Nov.

Dec

 

Trading

54.22

28.25

46.74

40.57

-

24.17

114.98

311.55

-

620.48

Manufacturing

149.10

549.00

4122.00

495.40

219.52

1339.11

256.93

345.09

157.78

7634.00

Non Financial Services

66.79

234.20

61.20

23.63

364.91

420.61

139.50

248.07

118.78

1677.71

Others

52.47

396.90

883.30

172.60

67.20

77.67

4554.26

596.99

879.84

7681.09

Financial

-

-

-

-

-

-

7.00

25.46

-

32.46

Total

322.60

1208.00

5113.00

732.20

651.63

1861.56

5072.67

1527.16

1156.40

17645.74

Note

SOURCE : Reserve Bank of India


Pages: 12 I 3 I 4 I 5 I 6 I 7 I 8 Next

June 2008