In September 2008, the Foreign Investment Promotion Board (FIPB) cleared 29 FDI proposals worth Rs.3,258.97 crore. These proposals were ratified by the Finance Ministry in two phases.

The Ministry cleared 17 FDI proposals on 04 September 2008, of which, the largest proposal worth Rs.700 crore was by Quippo Telecom Infrastructure, to increase foreign equity from 65.63 per cent to 82.55 per cent in the Telecom sector.

Featuring in the category of prominent proposals which were cleared was Ramky Infrastructure's Rs.400 crore proposal seeking post facto approval for converting from an operating company into an operating-cum-holding company, to make downstream investments. Biotor Industries also got the Ministry's nod for its proposal to bring in Rs.240 crore, to convert from an operating company into an operating-cum-holding company.

On 17 September 2008, the Finance Ministry cleared an additional 12 proposals involving FDI worth Rs.1,414.65 crore. Of these, the largest proposal worth Rs.570 crore was of National Housing Bank, Delhi along with United Guaranty Corporation, USA and International Finance Corporation, USA, to establish a JVC for undertaking mortgage guarantee activities. Polycab Wires' Rs.551.50 crore proposal for converting from an operating company to an operating-cumholding company to make downstream investment and issue warrants, was also given the go ahead.

Eighteen proposals were deferred during September 2008, on recommendation of the FIPB. These 18 proposals included one from Universal Biofuels, to incorporate and make downstream investment in subsidiaries; Krishnapatnam Port's post-facto approval for the FDI already brought in under automatic route, which otherwise requires FIPB approval. Other proposals deferred were of Delight Investments, Singapore; Meka Infrastructure, Mumbai; Quest Manufacturing, Bangalore; Tata Investment Corporation, Mumbai, among others.

Two proposals were reported to have been rejected. One was Mumbai-based JSW Infrastructure's, exposto- facto approval for having undertaken the activity of the holding company and of Elken International to undertake cash and carry wholesale trading for activities which had received approvals for being test marketed.

Other developments:

The government is re-considering a proposal to allow FDI up to 26 per cent in multi-brand retail, which will allow global giants like Wal-Mart Stores Inc and Tesco Plc to gain a foothold in India.

At present, 100 per cent FDI is allowed only in cash-and-carry businesses, which supply to small businesses. Also, 51 per cent foreign equity is permitted in single-brand outlets, which sell only one brand per product.

FDI inflows:

During the first six months of the fiscal 2008-09, statistics released by the RBI indicated that India received USD 20 billion FDI, a 20 per cent growth from last year. The government expects FDI inflows in 2008 to cross USD 40 billion.

In a recent report released by the United Nations Conference on Trade and Development (Unctad), it was revealed that India is the number two destination for FDI - behind only to China - in 2008 and will continue to be so till 2010.

The report also mentions a survey by Japan Bank for International Cooperation in which, Japanese transnational manufacturing companies have infact rated India above China, for establishing business operations. The recent year's growth of FDI into India has been attributed to the further opening up of telecommunications, single-brand retail, and increasing cross-border mergers and acquisitions.

However, Unctad adds that though the outlook for China and India looks pretty good, the total global FDI flow is expected to decline by nearly 13 per cent in 2008. Thanks to the ongoing financial crisis in the US which has already gobbled a few large investment banks and is threatening to wreck multiple others.