Rajkumar Dhoot, president of Assocham rubbished claims that FDI cuts exisiting jobs and rather, that, it offers multiplier results to the employment generation.
Singapore is the hotspot location for foreign direct investment (FDI) from Indian companies, according to a Assocham study.
Throughout May, over US$500 million of Indian investment was injected into Singapore.
Of Indian companies' total outward investment of US$2.35 billion, during May, Singapore accounted for approximately 25 per cent of the total outflows, reported the industry body’s report.
The US, the UK, Hong Kong, the UAE, the Philippines, and Mauritius were also popular receivers of India’s foreign direct investment.
It was reported that, while Mauritius remained the top source of India’s FDI, the level of outflow was not correspondently returned from India to Mauritius.
Mauritius “is somewhere at the bottom of the table of the countries preferred by the Indian firms for overseas investment,” claimed the report.
The figures correlated: of the 467 investing companies, just 24 gave precedence to Mauritius, which is a haven for corporate implementation of FDI due to the Indian-Mauritius Double Taxation Avoidance Agreement, reported The Times of India.
With a capital gains figure of zero, inward FDI from Mauritius as opposed to outward FDI for India, makes the best possible sense – according to the Assocham study.
The most popular investment sector was manufacturing, at 138 companies, this was followed by the service sector which recorded almost 100 Indian company investments in foreign ventures. Healthcare, information technology, asd asset management are seen as prominent areas of service sector interest. Within the manufacturing remit, pharmaceuticals, shipyards, metals, engineering, and textiles were popular amongst India’s outward FDIs.
“This shows that Indian manufacturing is no more a low-end phenomenon. It is making mark all around the world,” said Assocham president, Rajkumar Dhoot.
As many as 68 domestic firms invested abroad in sectors such as wholesale, retail, hotels, and restaurants. Multi-brand retail in India is yet to be offered to FDI.
“This is certainly a pointer to us. It would not be possible for India to keep its doors shut for the FDI in retail which is a very vibrant sector of the economy. It gives multiplier results to the employment generation rather than taking away the existing jobs, as is being made out,” said Dhoot.
There is a need to scale up the value chain in the service sector, reported the study.
Cheaper assets available at attractive valuations account for a prosperous FDI, said the industry body.
By Laura Neve Tacey
