See the article "Why FDI bypasses India". Though it's written from a liberal perspective, provides some useful data. India has received about $30 bn in the nineties (1991-2000), FDI $20 bn and portfolio investment $10bn. This would be less than 1% of India's GDP.
Anecdotal evidence and media speculation suggests that foreign portfolio investment is in reality Indian owned capital returning to India for investment in stockmarkets (money stashed away by Indian residents in Swiss banks, Cayman Islands etc.) Interestingly Virgin Islands said to be the second largest source of FDI in China, Hongkong being the largest.:-)
If you consider large corporates listed on Indian bourses, you get somewhat different picture. I found that about 20-25% of the total market capitalisation of large listed corporates belongs to listed MNCs, when I checked couple of years ago.
Ulhas
Interesting article this you placed. Particularly this :
Our record also compares badly with other developing countries. As against a total of $13 billion received by India in the last five years, China (mainland) received $209 billion, Brazil $123 billion and even little Malaysia got almost $26 billion, or double what we got. So much for the "flood" of FDI raising swadeshi hackles.
My comment:
Good for you that are achieving high growth rates with so few FDI. Brazil, despite this massive inflows of FDI, had the following growth rates from 1996-2000 (approximate)
1996-2,5% 1997-3,6% 1998-0,4% 1999-1% 2000-4,5%
Far from an economic boom, right? My point is that FDI is more or less like external loans. Can provide a boost to your economic development if properly managed, but simply cannot replace local capital accumulation, and results in significant extra expenses latter as profits are repatriated. The worst possible way to deal with FDI is selling local firms (private of public) as you get all the disadvantages of FDI withouth anything being added to your productive capacity (privatization, btw, was one of the main sources of FDI in Brazil in the mentioned period).
Alexandre
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