South Korea emerges as largest investor in India
(Wednesday, August 11, 1999)
Suveen K Sinha in New Delhi
South Korea has emerged as the largest investor in India in terms of foreign direct investment (FDI) approved during January-February this year, while Japan has slipped one notch to the fifth place, according to a Confederation of Indian Industry (CII) study.
The FDI approved from South Korea during the first two months of 1999 stood at Rs 3,080.89 crore, followed by Mauritius with Rs 1,110.86 crore, the United Kingdom with Rs 809.38 crore, France with Rs 610.22 crore and Japan with Rs 333.3 crore.
The top 10 is completed by Singapore with Rs 184.12 crore, Italy with Rs 179.36 crore, Switzerland with Rs 144.28 crore, the US with Rs 137.78 crore and Germany with Rs 50.67 crore.
Mauritius occupies the second position by virtue of being a tax haven, which encourages business organisations to set up special purpose vehicles there for investing in various countries, including India.
The CII study has pointed out that Japanese investments in India have started following a decreasing trend with a drop in 1998 (about Rs 1,302 crore), even as India and Japan hold their first investment dialogue in New Delhi over today and tomorrow.
The chamber has pointed out that lack of adequate infrastructure has been a major hurdle in the way of increased investment from Japan. It has also been estimated that the required level of investment in infrastructure in India for sustaining a 7 per cent growth in gross domestic product is $115-130 billion till the Year 2000.
The investment requirement would rise to about $215 billion in the subsequent five years. According to the study, Japan should take it as an opportunity to explore possibilities of investment in infrastructure in India. India has shown its preference for Japanese electronics and automobiles, points out CII, but a host of other sectors remain with huge potential for cooperation.
These sectors include computer software, petrochemicals, engineering plastics, shipbuilding, pollution control equipment, non-conventional energy sources, food processing and healthcare.
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