Mumbai: Foreign direct investments (FDI) into the country, including money raised by way of ADRs and GDRs, touched $10.3 billion in financial year 2005-06, the government said.

FDI constituted 37.12 per cent of the total capital flow of $27.7 billion, minister of state for finance P K Bansal informed the Lok Sabha.

He said the government has undertaken a comprehensive review of foreign direct investment policy and associated procedures in February 2006. The government has also done away with a number of rationalisation measures by doing away with the multiple approvals by the regulatory authorities, he said.

FDI flows into India and China have been driven mostly by low-cost investments and the opening up of these economies for wider investment opportunities.

Now that India is the new outsourcing hotbed, the country is seeing a new wave of back office investments by outsourcing companies in the West, mainly the US.

Energy-hungry India is attracting much foreign investment in the power and oil and gas exploration sectors as well while the government expects FDI flows into the infrastructure sector as well.