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Red tape cause of low FDI: Maran

The government on Friday admitted in the Lok Sabha that foreign direct investment was not up to expectations having targetted $10 billion.

Replying to queries during Question Hour, Minister for Commerce and Industry, Murasoli Maran conceded that red tape was the cause for low FDI touching only $4 billion and sought the support of all political parties to enable the government bring a slew of proposals.

"If support is given by all political parties specially for reform of labour laws and other measures, we can increase foreign direct investment in the country," he said.

The inflows of foreign investment which includes foreign direct investment and foreign portfolio investment, are dependent upon various factors, such as domestic economic conditions including capital markets, policy regime governing foreign investment, world economic trends and strategies of global investors, Maran said.

With regard to foreign institutional investors investment, there has been a positive trend after the negative growth in 1998.

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