The Hindu : Business : `FDI policy still evolving'

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Friday, May 05, 2006

Business

Business

`FDI policy still evolving'

Special Correspondent

India's growth has been largely fuelled by domestic savings

HYDERABAD: As in any other policy which was "still evolving,'' Finance Minister P. Chidambaram on Thursday conceded that there were concerns about the country's foreign direct investment (FDI) policy, while thereby indicating that a fresh round of fine-tuning was on the anvil.

Addressing delegates at the `Advantage India' session in the course of the annual meeting of the Asian Development Bank (ADB) here, Mr. Chidambaram said: "I know that some concerns are voiced about our FDI policy. Our FDI policy, like any other policy, is an evolving policy.''

The Government, he said, was aware of the fact that FDI would have a major role to play in not just stepping up investments into the country but also in the transfer of knowhow and globalisation of Indian companies.

Till now, "our growth has been largely fuelled by domestic savings. However, we also accept that FDI would play a very important role,'' he said. At the same time, despite the policy concerns expressed by certain sections of foreign investors, Mr. Chidambaram noted that those already doing business in India "have had satisfactory business experience in the country.''

Highlighting India's successive growth stories in services and the manufacturing sector, Mr Chidambaram said the second and much bigger wave of offshore manufacturing was yet to come. "The second wave, just beginning, could reach $1.6 trillion annually [and] will consist of skill-intensive manufacturing. This will work to India's advantage," he said.

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