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'A Call for Action on Climate Change'on Earth Day
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| 03. INVESTMENT UPDATE |
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FDI INFLOWS INTO INDIA TOUCH A RECORD HIGH
Announcing a record high of FDI (equity) inflows in India while announcing the Annual Supplement to the Foreign Trade Policy (2004-09), Shri Kamal Nath, Minister of Commerce & Industry, said.
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“I must mention here about the robust growth in our Foreign Direct Investment. A liberal Trade Policy has a direct effect on FDI flows and the two are closely inter-related. The year 2006-07 has seen our FDI equity inflow go up to almost US$ 16 billion from US$ 5.5 billion in the previous year – almost tripling of the inflows in one year. The last three years of our Government has seen a staggering 725% increase in FDI inflows – up from US$ 2.22 billion in 2003-04 to US$ 16 billion in 2006-07! In line with the international practice of including the retained earnings reinvested, our FDI touches US$ 19 billion in 2006-07, constituting 2.3% of our GDP. This is about 6.8% of the gross capital formation or gross investment in the economy. I am sure, you would agree, that this is quantum jump compared to only 0.5% of GDP and about 1.5% of gross investment three years ago. The directional flow of FDI into manufacturing and export of goods and services is contributing immensely to our export efforts”. |
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India top offshoring destination: Report |
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According to a recent survey by AT Kearney an unbeatable mix of low costs, deep technical and language skills, mature vendors and supportive government policies have taken India to the top among global destinations for offshoring services. And this is despite all the concern about overheating, wage inflation and service levels, it said.
In overall ranking, dominated by the developing countries from Asia, India is followed by China, Malaysia, Thailand and Brazil, the survey, christened Global Services Location Index 2007 said. |
To arrive at final ranking, AT Kearney surveyed over 50 countries for different aspects related to offshoring, like people skills, financial attractiveness and business environment. India maintains a wide, albeit slightly shrinking, lead over China, confirming what industry surveys and visiting executives have found, the survey said.
While compensation costs in India have risen because of the recent high economic growth, "these cost escalations have been matched by corresponding increases in skill supply and quality indicators," the global consultancy major said. |
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INDIAN INVESTMENTS ABROAD: AN UPDATE |
Indian Hotels to acquire US hotel
Tata group company Indian Hotels said it will acquire US-based Hotel Campton Place for around Rs 264 crore ($60 million), a move that will beef up its presence in the US market. Hotel Campton Place is a 110-room luxury boutique hotel situated in Union Square in the heart of a Gateway city, San Francisco, on the West Coast of the US. The board of directors of the Indian Hotels Company have approved of the acquisition subject to necessary statutory regulations.
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Indian company bids for European major
Ahmedabad-based Suzlon Energy is yet another Indian company is to bid for a global major, which has entered a multi-million-euro bidding war to take over German wind turbine maker REpower. Suzlon Energy is India's biggest builder of wind farms, and is run by billionaire businessman Tusli Tanti. As increasing global energy needs prompt a shift to alternative sources of energy, the company is well placed to drive the global market. Earlier Tata Steel acquired Corus, |
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IMF projects 7.8% growth
The International Monetary Fund (IMF) has forecast that the Indian economy will grow at 7.8% in 2008. “Emerging markets and developing countries are expected to continue to grow strongly, albeit at a somewhat slower pace than in 2006,” IMF said in its report, World Economic Outlook. In India, rising revenues are expected to lead to a more than 1% of the gross domestic product (GDP) decline in the deficit to 6.3% of the GDP in 2006-07. However, with a public debt ratio of 80% of the GDP, further consolidation remains a priority. Inflationary pressures across the region remain generally well contained, although rapid credit growth poses a challenge in a number of countries. |
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India more attractive for FDI
The FDI target for 2006-07 of 12 billion dollars has been breached and equity investment from abroad would cross 15 billion dollars for the last fiscal. With the growth momentum continuing, the government expects FDI to touch 25 billion dollars this fiscal. The FDI inflows have shown a year-on-year growth of 250 per cent in 2006-07. In 2005-06, FDI stood at 5.5 billion dollars. Officials said if the reinvested earning are taken into account, the total FDI in 2006-07 would touch 18 billion dollars as against 7.5 billion dollars in the previous year. |
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India is one of our biggest portfolio: Wolfowitz
"India is one of our biggest portfolios. It has been making wonderful progress in the last fifteen years or so," Wolfowitz said at a Round Table for a select group of media persons ahead of the weekend's Spring Meeting of the International Monetary Fund and the World Bank.
"We learn a lot from the Indian experience," Wolfowitz said, pointing to his own recent visit to the State of Andhra Pradesh "where some eight million of the poorest, of the most marginalised, participating in self help groups -- not just getting micro-credit help, but really getting self confidence." |
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