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India, China's FDI inflows surge during first half of 2011


Jun 15, 2011
Asian giants India and China saw their foreign direct investments (FDI) surge in the first half of 2011 amidst global uncertainties, indicating the stable growth in these countries that continued to attract foreign investments.

India's FDI surged by 53.8 per cent to Rs75,506 ($16.68 billion) crore during January-June 2011, while China's rose by 18.57 per cent year on year to $69.19 billion in the seven months of this year, according to official data.

The surge in India and China's FDI has come at a time of global economic uncertainties in Europe and the US, the biggest sources of investments overseas.

India's FDI stood at Rs49,099 crore during January-June 2010, minister of state for finance Namo Narain Meena said in a written reply to the Rajya Sabha yesterday.
Meena said that under the government approval route, FDI up to Rs1,200-crore limit is cleared by the finance minister on recommendations of the Foreign Investment Promotion Board (FIPB) while investments above this are sent to the Cabinet Committee on Economic Affairs for approval.

"The benefit of automatic path is intended to dispense with the need of multiple approvals," he added.

China's FDI fell to $8.3 billion, with year-on-year growth of 19.8 per cent in July, the ministry of commerce said on Tuesday.

"The monthly FDI figure is relatively volatile and a decline does not mean anything substantial," said Zhang Zhiwei, chief China economist of Nomura Holdings Inc.

Compared with other emerging economies, China remains competitive in attracting investment and FDI inflows should be positive for the full year, he said.

China approved 15,600 foreign-invested companies to start business operations in July, up 7.89 per cent from the same month last year, according to the ministry of commerce.

In July alone, China approved 2,138 foreign-invested companies to start business operations, an increase of 2.69 percent from the same month last year.

"The development of emerging industries will spark a new round of foreign investment, as these sectors offer golden opportunities that foreign investors can't pass up," Luo said.

China is also revising its guidelines for foreign investment to expand market access for overseas companies. These guidelines are expected to be announced in the coming months.
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