Foreign direct investment to India during 2006-07 trebled over the last year, the RBI announced yesterday. FDI accounted for USD 17.1 billion of a total of USD 27.3 billion of capital inflows during the year.

Capital inflows include FDI, External Commercial Borrowings (ECBs), NRI remittances and portfolio investments. During 2006-07, FDI put up a good performance, bringing in equity capital, re-invested earnings and inter-corporate debt transactions.

The RBI report on Currency and Finance says that the swelling FDI figures are a sign of the confidence foreign investors have reposed in the Indian economy.

The liberalisation of the Government’s FDI policies has contributed to the surge in foreign investment in equal measure.

India’s Commerce Minister Kamal Nath had announced the previous day that the government is expecting FDI worth USD 30 billion in the current fiscal year, 2007-08 India’s external debt, however has also gone up by USD 16.2 billion over last year, touching USD 142.7 billion by December 2006.

The rising ECBs, NRI deposits and short-term credit have largely been responsible for this increase.

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