India has been ranked at the second place in global foreign direct investments in 2010 and will continue

to remain among the top five attractive destinations for international investors during 2010-12 period, according to United Nations Conference on Trade and Development (UNCTAD) in a report on world investment prospects titled, 'World Investment Prospects Survey 2009-2012'. The 2010 survey of the Japan Bank for International Cooperation released in December 2010, conducted among Japanese investors, continues to rank India as the second most promising country for overseas business operations. A report released in February 2010 by Leeds University Business School, commissioned by UK Trade & Investment (UKTI), ranks India among the top three countries where British companies can do better business during 2012-14. According to Ernst and Young's 2010 European Attractiveness Survey, India is ranked as the 4th most attractive foreign direct investment (FDI) destination in 2010. However, it is ranked the 2nd most attractive destination following China in the next three years. Moreover, according to the Asian Investment Intentions survey released by the Asia Pacific Foundation in Canada, more and more Canadian firms are now focusing on India as an investment destination. From 8 per cent in 2005, the percentage of Canadian companies showing interest in India has gone up to 13.4 per cent in 2010. India attracted FDI equity inflows of US$ 2,014 million in December 2010. The cumulative amount of FDI equity inflows from April 2000 to December 2010 stood at US$ 186.79 billion, according to the data released by the Department of Industrial Policy and Promotion (DIPP). The services sector comprising financial and non-financial services attracted 21 per cent of the total FDI equity inflow into India, with FDI worth US$ 2,853 million during April-December 2010, while telecommunications including radio paging, cellular mobile and basic telephone services attracted second largest amount of FDI worth US$ 1,327 million during the same period. Automobile industry was the third highest sector attracting FDI worth US$ 1,066 million followed by power sector which garnered US$ 1,028 million during the financial year AprilDecember 2010. The Housing and Real Estate sector received FDI worth US$ 1,024 million. During April-December 2010, Mauritius has led investors into India with US$ 5,746 million worth of FDI comprising 42 per cent of the total FDI equity inflows into the country. The FDI equity inflows in Mauritius is followed by Singapore at US$ 1,449 million and the US with US$ 1,055 million, according to data released by DIPP. Investment Scenario In the year 2010, India has assumed a notable position on the world canvas as a key international trading partner, majorly because of the implementation of its consolidated FDI policy. The consolidation, first undertaken in March 2010, pulls together in one document all previous acts, regulations, press notes, press releases and clarifications issued either by the DIPP or the Reserve Bank of India (RBI) where they relate to FDI into India. According to the modified policy, foreign investors can inject their funds though the automatic route in the Indian economy. Such investments do not mandate any prior government permission. However, the Indian company receiving such investment would be required to intimate the RBI of any such investment. The FDI rules applicable to such sectors are, therefore, fairly clear and unambiguous. n May 2010, the government cleared 24 foreign investment proposals, worth US$ 304.7 million. These include:

Asianet's proposal worth US$ 91.7 million to undertake the business of broadcasting non-news and current affairs television channels. Global media magnate Rupert Murdoch-controlled Star India holdings' investment of US$ 70 million to acquire shares of direct-to-home (DTH) provider Tata Sky. AIP Power will set up power plants either directly or indirectly by promotion of joint ventures at an investment of US$ 24.4 million.

According to the 6th Annual Edition 2010 data released by Grant Thornton India, an accounting and consulting firm, total of 971 deals valued at US$ 62.2 billion were registered. The increasing confidence in the Indian economy, buoyancy in the capital markets, significant improvements in global perception of India and improved

performance of the earlier cross-border transactions, resulted in India Incs total merger an d acquisitions (M&A) and private equity (PE) activity to reach US$ 6.24 billion, registering a growth of 159 per cent over 2009. The total M&A deals in 2010 were valued at US$ 49.8 billion (622 deals) and PE were valued at US$ 6.2 billion (253 deals), while the qualified institutional placement (QIP) deals in 2010 were valued at US$ 6.2 billion (56 Deals). Moreover, cross border activity also surged in 2010 and significant outbound investments totalled US$ 22.50 billion, while the inbound activity also increased significantly to touch US$ 9 billion (91 deals).

Sembcorp Utilities, a company based in Singapore, has picked up 49 per cent stake in the 1,320 mega watt (MW) coal-fired plant of Thermal Powertech Corporation India Ltd, a special purpose vehicle and subsidiary of Gayatri Projects Ltd, for US$ 235.1 million. Renewable energy project developer, Juwi Group, launched its first facility in India in Bengaluru resulting in Juwi India Renewable Energies Pvt Ltd, being headquartered in Bangalore. In the biggest foreign direct investment (FDI) into India, BP, the worlds fourth -largest energy company, will pay $7.2 billion for a 30 per cent stake in 23 oil and gas blocks of Reliance Industries Ltd (RIL). Investments by French companies in India are expected to touch US$ 12.72 billion by 2012, and would focus on automobile, energy and environment sectors among others, according to Jean Leviol, Minister Counsellor for Economic, Trade and Financial Affairs, French Embassy in India. Japanese pharmaceutical major, Eisai plans to invest US$ 21.25 million in India to expand its manufacturing capacity and research capabilities. The investment will be used for increasing the manufacturing capacity of Active Pharmaceutical Ingredients (APIs) and product research at the Eisai Knowledge Centre in Visakhapatnam. India's largest automobile company Maruti Suzuki will supply its latest compact car A-Star to Volkswagen AG . The car, which will undergo some modifications and design changes, will be sold in India and Asian markets under a new brand, according to senior officials in the automobile industry. Franco-American telecom equipment maker, Alcatel-Lucent plans to shift its global services headquarters to India. The headquarters would need about US$ 500 million in investments over three years, according to Ben Verwaayen, Chief Executive Officer, Alcatel-Lucent. Robert Bosch Engineering and Business Solutions Ltd (RBEI), a 100 per cent owned IT subsidiary of Robert Bosch GmbH of Germany, a supplier of technology and services to automobile OEMs, has announced an additional investment of US$ 66.36 million over next two years to expand its global powertrain electronics centre in India. RBEI develops software for in-house applications of Bosch group for its global operations.

The HSBC Markit Business Activity Index, which measures business activity among Indian services companies, based on a survey of 400 firms, rose to 58.1 in January 2011 from 57.7 in December 2010. Policy Initiatives The Government of India has released a comprehensive FDI policy document effective from April 1, 2010. The Circular 1 of 2010 consolidates into one document all the prior policies/regulations on FDI which are contained in FEMA, 1999; RBI Regulations under FEMA, 1999 and Press Notes/Press Releases/Clarifications issued by DIPP and reflect the current 'policy framework' on FDI. The consolidation initiative is highly meritorious on part of DIPP. The regulator also endorsed the practice of making bi-annual amendments to the policy (as against the previous practice of implementing ongoing notifications) and hence, the most recent policy came into effect on October 1, 2010. Furthermore, the government has allowed the Foreign Investment Promotion Board (FIPB), under the Ministry of Commerce and Industry, to clear FDI proposals of up to US$ 258.3 million. Earlier all project proposals that involved investment of above US$ 129.2 million were put up before the Cabinet Committee of Economic Affairs (CCEA) for approval. The relaxation would expedite FDI inflow, according to Mr P Chidambaram, Union Home Minister.