During the fiscal 2007-08, India received US$ 24.57 billion (approx. Rs.98,920 crore) of Foreign Direct Investment. Among the Asian countries, only China and Hong Kong were ahead of India in terms of FDI inflows during the same period. Expecting the buoyancy in the FDI inflows to continue, the Union Ministry of Commerce has set a target of US$ 35 billion for the current fiscal, 2008-09.

FDI Clearances in May 2008

The Finance Ministry cleared a total of 47 FDI proposals worth Rs.2,955.16 crore, in three instalments. On 01 May 2008, the Ministry cleared 15 proposals worth Rs.308.57 crore. Of the 15, the biggest proposal was that of US-based NYSE Euronext, that plans to pick up 5 per cent equity stake in Multi-Commodity Exchange (MCX) at an FDI worth Rs.218.51 crore.

Other prominent proposals to receive government approvals were that of Images Multimedia and Japan-based Metal One Corporation, a steel product supplier. Images Multimedia, a portal for retail and other business information, plans to bring in Rs.33.37 crore as foreign equity in a company publishing specialty magazines. Metal One Corporation plans to invest Rs.32 crore in setting up a new wholly-owned subsidiary.

Later, On 15 May 2008, the Finance Ministry cleared 18 proposals involving FDI worth Rs.1,820.84 crore. Of the 18, the largest proposal was that of Manipal Educational Group, which plans to induce foreign investment of Rs.1,435 crore in a holding company.

Sweden's Volvo received the Finance Ministry approval for its plans to invest Rs.123 crore for 8.1 per cent stake in the proposed joint venture with Eicher Motors. However, another of Volvo's proposal has been referred to the CCEA, as the investment involved in it is above Rs.600 crore.

The Finance Ministry also cleared Mauritius-based Indivision India Partners' proposal to invest foreign equity worth Rs.120 crore in a company engaged in merchant banking and other Non-Banking Financial Company (NBFC) activities.

The third installment of FDI clearances took place on 29 May 2008, in which the Finance Ministry cleared 14 FDI proposals worth Rs.825.75 crore. The major proposals approved out of the 14, were that of Havells India (Rs.277.94 crore), Laqshya Media (Rs.276.25 crore) and Ager Hotels Group (Rs.212 crore). Havell India has been granted approval to issue shares and warrants convertible into shares for an investment of Rs.277.94 crore. Laqshya Media is planning to induce foreign equity worth Rs.276.25 crore by way of allotment of equity shares and convert the operating company into operating-cum-holding company. Lastly, Ager Hotels plans to convert an operating company into an operating-cum- holding company and to make further downstream investments.

Eleven proposals were deferred during the month. These include proposals of DLF Limitless Developers, Pepsico India, JSW Infrastructure, Delight Investments, Meta Telecom and Connex Teltech. Pepsico India's proposal was deferred, as it sought a waiver of the divestment condition that required it to offer a part of its equity stake to Indian shareholders.

The applications of Mumbai-based JM Financial Venture and Federal Mogul, USA have been rejected. LOTTE Confectionery, Korea and ICICI Securities have been advised to access the automatic route, as their proposals do not require approvals from FIPB.