During the quarter January-March, 2008, 666 proposals amounting to $ 4,635 million were cleared for investments abroad in joint ventures(JV) and wholly owned subsidiaries(WOS), as against 549 proposals amounting to $7,115 million during the corresponding period of the previous year
According to a repoer by the Reserve Bank of India (RBI) India InvestmentAbroad in Joint Venturws and Wholly Owned Subsidiaries:2007-08(April-March), equity accounted for 60.4%% of the proposals for investment, followed by loans (28.1%) and guarantees (11.5%). During the quarter, 99.5% of the proposals involving 91.4% of the investments were through automatic route and the rest were through approval route.
During the full financial year 2007-08, the number of proposals for investment in JVs and WOSs stood at 2,261 for an aggregate amount of $ 23,072 million, recording a growth of 24.4 % in the number of proposals and 53.2% in amount of investment over the year.
Equity accounted for 61.2% of the proposals for investment, while loans for 11.4% and guarantees for 27.4%. During 2007-08, automatic route covered 99.6% of the proposals involving 96.4% of the amount of investments. The rest were through approval route.
Within the manufacturing sector, proposals were in the areas like electronic equipment, fertilizers, agricultural and allied products and gems and jewellery. Investment proposals in non-financial services included activities, such as telecommunications, medical services, software development services and stock broking. Proposals in trading covered areas, such as textiles, chemicals, readymade garments and petroleum products. Investment proposals in the category of others included oil exploration, shipping and market research.
Large Indian investments going to countries like Singapore, Cyprus, the Netherlands, UAE, British Virgin Islands and Mauritius reflect the generally liberal policies of these countries, particularly the involving favorable tax treatment and investment protection treaties.
Actual outward FDI during the quarter stood at $7,322 million, which was higher by 63.4% than that during previous year.
Of the total investments, 70% were in the form of equity and the remaining 30% were loans.
Actual outward FDI during 2007-08 amounted to $17,436 million, an increase of 29.6% over the investments of $13,454 million in the previous year. Of the total investments, 81.6% were in the form of equity and the remaining 18.4 % in the form of loans.
The India?s outward FDI witnessed a substantial pick up from 2006-07 onwards, facilitated largely by progressive liberalisation of overseas investment policies.
According to the available information, during the quarter January- March, 2008, inflows (such as dividend, royalty, license fee, repayment of loan, etc.) from India?s outward FDI amounted to $ 578 million.
