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FDI inflows into the country more than trebled to $11.4 billion in the first six months of calendar year 2007 with services, telecom, electrical equipment, real estate and transportation emerging as the favoured sectors.

Inflows in the first quarter of FY08 grew a whopping 185% to $4.9 billion compared to $1.7 billion in April-June of FY07, on the back of investments by companies such as UK’s Vodafone.

“This is a huge jump. The most important thing is that these are largely first-mile investments and are obviously going to grow in geometrical proportion,” commerce and industry minister Kamal Nath told reporters. He said India remained a favourite destination for FDI “despite what is going on in the stock market”.

The minister had earlier estimated possible FY08 inflows at $25-30 billion.
Asked about the ongoing review of FDI policies, Mr Nath said it should be completed by the next month. He said the review would focus on opening up of new areas, excluding retail, and removing some procedural anomalies.

Vodafone topped the list of foreign investors bringing in $801 million. It was followed by Matsushita Electric Works of Japan with $342 million. The British firm acquired controlling stake in Hutch Essar earlier this year, while the Japanese company bought Anchor Electricals. GA Global Investments was the third largest investor.

Mr. Nath said the country had received $15.7 billion FDI in FY07 compared to $5.5 billion a year ago. “If reinvested earnings and other capital inflows are included, total inflows in FY07 add up to $19.5 billion, compared to $7.7 billion in FY06,” he said.

Tax haven Mauritius retained its status as the biggest source of foreign direct investment into India. Other major countries investing into India were Japan, Cyprus, the US and Singapore.

Delhi region received the maximum inflows of $1.3 billion, accounting for 36% of the total FDI up to May. If Mumbai, Bangalore and Chennai were added, they accounted for two thirds of the total inflows into the country.

On the industrial growth figures, he said the growth momentum was intact and June figures for the Index of Industrial Production was a temporary blip due to the monsoon and added that growth would soon pick up.

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