May 15, 2003|
India: Attracting confidence
The opening of the Indian economy in 1990-91 brought a drastic shift in the perception of the international investor community towards our country. A significant amount of capital started flowing into the country, which kept pushing up India's foreign exchange (forex) reserves to newer highs. Foreign Direct Investment (FDI) is a part of the inflow. Yearly FDI inflows went up from a paltry US$ 97 m in FY91 to over US$ 4,000 m in FY03 as per the provisional figures issued by the Reserve Bank of India (RBI) for FY03.
This is a healthy inflow of investments considering the turmoil the Indian economy has gone through in the recent years. Whether it was the Gujarat riots or the Indo-Pak standoff or poor monsoons resulting in economic slowdown, the pouring of FDI into the country reaffirms the belief of the international community towards India's growth prospects going forward. Undoubtedly, the government's divestment programme has also played some role in attracting FDI into the country.
Moreover, the cause for the huge inflows in the form of FDI could be due to the fact that the government has been at the forefront of development. It has started taking steps by pushing for growth in infrastructure (roads, railway and ports) and housing sectors. Also, with the budget focusing on health, education and employment, this could provide a further fillip to development. The government is also trying to speed up the reforms process in sectors like power and banking.
India's share rests at about 5% of the total FDI flows into developing countries. The recent inflows could be due to the uncertainty prevailing in major world economies. Attraction towards India lies in the fact that while developed countries are likely to grow in the range of 2%-3%, India is projected to grow at almost twice the rate. Another heartening fact is that, a few years back only 20%-25% of FDI approvals translated into actual investment, this percentage has gone up to over 70% in FY02. This is a good indicator of investor confidence in the policies, reforms and growth of our country.
More Views on News
Jun 10, 2017
Forty Indian investing gurus, as worthy of imitation as the legendary Peter Lynch, can help you get rich in the stock market.
Aug 17, 2017
PersonalFN simplifies the mutual fund account statement for you.
Aug 17, 2017
A small-cap Indian company with high-return potential and blue-chip-like stability is set to supplant the Chinese players in this niche segment.
Aug 17, 2017
Mr Trump is in the White House and the gods are in their heavens; what's not to like?
Aug 16, 2017
All across the country, the old gods become devils. New, gluten-free gods take their places...
More Views on News
Aug 7, 2017
The data tells us quite a different story from the one the government is trying to project.
Aug 10, 2017
Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.
Aug 8, 2017
Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...
Aug 12, 2017
The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.
Aug 7, 2017
Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...
Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement. LEGAL DISCLAIMER:
Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here
. The performance data quoted represents past performance and does not guarantee future results.SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: email@example.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407