The Economic Survey 2007-08 has said that foreign direct investment (FDI) inflows into India accelerated in 2006-07, due to reforms in policies, better infrastructure, and a more vibrant financial sector.

On a gross basis, FDI inflows into India after rising to a level of $6.2 billion in 2001-02 have risen to $23.0 billion in 2006-07. The trend continued in the current financial year, with gross FDI inflows at $11.2 billion in the first six months. FDI inflows continued to be preponderant of the equity variety, broad- based and spread across a range of economic activities like financial services, manufacturing, banking services, information technology services and construction.

FDI grew by 179.5 per cent on a net basis during 2006-07, while the growth was 150.2 per cent on gross basis. Even as FDI into India grew substantially, a simultaneous upswing in outward investment moderated the over all net inflows.

Outward investment by India shot up from levels less than $2.4 billion in the period 2003-04 to 2004-05, to reach $14.4 billion in 2006-07. Thus, over all net FDI in 2006-07 was at $8.5 billion.

The trend continued in the current year also, with FDI inflows in the period April-September 2007 being moderated by outward investment of $7.3 billion, to yield net flows of $3.9 billion. The proportion of payments to receipts under FDI into India was 0.7 per cent and 0.4 per cent in 2005-06 and 2006-07 respectively. This indicates the lasting and stable nature of FDI flows in India.