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FDI in 1999 may touch $ 3.5 billion, says industry secretary

India is likely to attract foreign direct investment of $ 3.5 billion this calender year, up by around 36 per cent over of $ 2.2 billion dollars during 1998, Industry Secretary Ajit Kumar said today.

Till September this year, India has received $ 3 billion FDI, Kumar said while addressing a seminar on ''FDI into India -- Problems and Prospects'', organsied by the Associated Chambers of Commerce and Industry of India.

Although the percentage growth of FDI this year seems quite impressive, it is quite meagre when compared to $ 3.3 billion of FDI during 1997.

Moreover, the country needs at least $ 10 billion of FDI if it wants to witness a seven per cent GDP growth. To achieve ten per cent growth of GDP, the country requires $ 25 to 30 billion, Assocham president K P Singh said.

In order to attract such a huge sum of FDI, the government is trying to evolve a single form structure in place of around 40 forms at present, Kumar said. The Union government will consult states like Andhra Pradesh, where such a system exists.

The new system will aim at providing various sorts of registrations to foreign investors at one go, he said.

When asked who will be the issuing authority for such a form, Singh stated that it is a minor matter and once the new structure is put in place, this matter could also be easily decided.

The industry secretary said in the next meeting of the Foreign Investment Implementation Authority, to be held within three months, foreign investors will be invited alongwith state governments so that concrete suggestions may be arrived at.

To a question on no-objection certificate required by the foreign companies from its existing joint venture partner if it wants to float a hundred per cent subsidiary, Kumar said the clause is added only after requests from a section of the industry.

''If the three apex chambers give their unanimous views on the subject, the government would be willing to do away with such a clause,'' he said in a lighter vien.

Singh said it is not reasonable to compare India's position in terms of attracting FDI with China as the communist nation had started the economic reforms process 12 years earlier than India.

Besides, 75 per cent of China's FDI comes from non-resident Chinese, he said. India had $ 11.2 billion of FDI stocks till 1997 against $ 217.3 billion stock by China.

In his presentation, Honda Siel Cars India Limited president and CEO Teruo Fujisaki lamented that his company did not receive positive response from the Directorate General of Foreign Trade despite having indegenisation level of above 70 per cent.

Stuart Johnson, BP Amoco associate president said investment limit of $ 500 million set by the Indian authorities for foreign investment in refineries is not justified in view of global recessionary trend.

UNI

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