FDI equity inflows to India during May touched $4.664 billion, the second highest inflow received in any month for the last eleven financial years. They also represent an increase of around 111% over the FDI equity inflows of $2.213 billion received in the same month last year, as also the highest FDI equity inflow, in the last eleven financial years (since the financial year 2000-2001), received in the month of May, data released by Ministry of Commerce and Industry say.

"The recent trend of dip in FDI inflows appears to have been reversed in the current financial year, where a significant upward trend in the FDI inflows is evident." it said.

During April-May 2011, the total FDI equity inflows were $7.785 billion, compared to $4.392 billion in the corresponding period in the preceding year, reflecting a 77 per cent increase.

Recent investments are an indicator of the positive trend in FDI. For example, the proposed tie-up between BP and Reliance, with a likely FDI of over $7 billion, could possibly be the single largest FDI into any emerging market. Similarly, Vodafone's purchase of Essar's stake, at around $5 billion, is also an indicator of continuing investor confidence in India. The approvals given to POSCO and to the Cairn-Vedanta acquisition (a deal of around $8-9 billion) are also likely to substantially increase FDI this year, the ministry said.

There has been a continuing and sustained effort to make the FDI policy more liberal and investor-friendly. Significant rationalization and simplification of the policy has, therefore, been carried out in the recent past, it said.

RTTNews