Foreign Direct Investment in India

The Reserve Bank of India, this week, said that the total amount of FDI in India in the first quarter of this financial year exceeded the TOTAL received in 2005/06, which amounts to $10bn (£5.4bn).

Of the $10bn, a little bit more than $2.2bn was a result of the purchasing of shares by foreign companies in Indian businesses, which shouldn’t come as a surprise with the likes of Tesco and Vodafone showing an interest in India.

There’s an ongoing debate as to whether India can catch up with China, after all the latter nets upto $50bh on average every year. If India continues the explosive growth that these figures show, then there’s no reason why it shouldn’t match China. After all, India has over the past few years accrued the following sums:

2005/06 – $10bn

2006/07 – $22bn

2007/08 – $32bn

If the first quarter trend continues, then India is likely to meet, and possibly break, the RBI’s FDI target of $35bn for 2009.