In the backdrop of the announcement made by the UN body UNCTAD, that global FDI will shrink by 30 pc in 2009, India has something to cheer! The month of July saw the total FDI inflows into India since 2000 cross the $100 billion mark. Between April 2000 and July 2009 the country received $100.33 billion (Rs 4,44,188 crore).

Among the source countries, Maurities was way ahead of others. The country accounted for 44 per cent of the total FDI India received during the above period. The Indian government's double taxation avoidance treaty with Mauritius, has made increased number of foreign investors to take the Mauritius route to invest in India. The other large sources of FDI are Singapore, USA, UK and Netherlands.

Sectoral analysis indicates that India's services sector topped the table, receiving 23% of the cumulative equity FDI inflows followed by computer software, hardware, telecommunication and real estate.

In October 2009, the Union Ministry of Finance, on recommendations of the FIPB has cleared 26 FDI proposals worth Rs 1,360.52 crore.

Of all the proposals cleared, New Delhi based Capricorn Hospitality Services' plans to bring in foreign investment of Rs 576 crore or up to 49 per cent of the equity share capital was the largest. The company intends to make downstream investments, either directly or through other investment companies.

Another proposal was of Hyderabad based Indus Renewable Energy India which plans to make downstream investments of Rs 500 crore in operating and / or operating-cum-investing companies engaged in the hydroelectric power sector.

Ahmedabad based Sadbhav Engineering's proposal to issue and allot Series A and Series B detachable warrants on a rights basis which will result in FDI inflow of Rs 125 crore also received the finance ministry clearance during October 2009. Other proposals that got the ministry's nod were of Travel Channel International, Mission Biofuels, and Supreme Infrastructure etc.

In all, 14 proposals have been deferred. These include the proposal by Jet Airways (India), Mumbai, to raise money from FIIs through the Qualified Institutions Placements route; Opto Circuits (India), Bangalore, proposal to issue Convertible Warrants on a preferential basis and that of UTV Software Communications.

The ministry rejected four proposals in October 2009. The proposed JV between EADS Deutschland GmbH, Germany, and L&T, Mumbai, was rejected yet again. The two companies plan to incorporate a manufacturing JV company to undertake production of defence equipment.

The Union government is working to bring limited liability partnerships (LLPs) within the scope of FDI guidelines, which is likely to facilitate the inflow of overseas capital through a corporate structure that has recently been allowed in India.

The ministry of corporate affairs which administers the LLP Act that came into effect in April 2009, and the department of industrial policy and promotion are working to amend FDI guidelines. The new rule is expected to be introduced in a few months.

LLPs which combine the features of partnerships and limited liability companies are the preferred corporate structure for the Services Sector, particularly tax-accounting and law firms.

Extending the FDI norms to LLPs is expected to give rise to large partnership firms with foreign investment, particularly in the Services Sector. Nearly 250 LLPs have been registered in India since April, when the LLP Act came into force.