India may miss FDI target in FY’09

The country is likely to miss the foreign direct investment target of USD 35 billion dollars for the current fiscal due to the global credit squeeze.

Commerce and Industry Minister Kamal Nath today said that the country would be able to receive USD 30 billion foreign investment inflows in the current financial year.

“We will be able to go to USD 30 billion,” Nath told reporters here on the sidelines of MindMine Summit-2009.

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However, the FDI inflows of USD 19.7 billion in April-November have made it clear that this fiscal’s target is too ambitious to achieve given the recession in the US and other developed economies, which are the major sources of cross-border investment.

The country needs more than USD 10 billion in the last four months of the current fiscal ending March to achieve the full-year figure of USD 30 billion.

Fund flow has trickled in recent past and the country received just USD 1 billion FDI in November 2008. In October this fiscal, FDI slipped to USD 1.4 billion after maintaining robust inflows till September with a monthly range of USD 2.5-3 billion.

Experts also opined that it would be difficult for India to achieve the FDI target. “We are certainly not going to meet the target … Even FDI inflows could be weaker in the next fiscal as well,” ICRIER Director Rajeev Kumar said.