Need to create favourable environment to attract FDI: PM

New Delhi, Feb 16 (PTI) In the backdrop of demands for
opening multi-brand retail for FDI and liberalising the regime
for other sectors like defence, Indian Prime Minister Manmohan
Singh on Wednesday admitted there was a need for "favourable"
environment for fund flow from abroad.
"I think we need to strengthen the resolve to create
favourable environment for larger flow of funds from abroad",
he said.
Addressing editors of electronic media here, he, however
added the government's policies could not be blamed for drop
in FDI as the current international scenario was prompting
foreign funds to move out from emerging markets.
"It is not our mistake (downflow in FDI). The
international situation is such that funds are moving out of
emerging markets. We are today functioning in an environment
where what happens outside affects us," Singh said.
"Therefore is not easy to say that what happens to fund
flow is entirely a function of our policy," he added
The Prime Minister also stated that policies followed
by the developed economies also played a part in foreign
investments coming into India.
"It is also a function of what policies our other
friends, particularly, the developed countries adopt," he
said.
During April-December of the current fiscal, FDI inflows
declined by 23.14 per cent to USD 16.03 billion over the year
ago period.
The Government has taken several steps like initiating
discussions on opening multi-brand retail for FDI.
It is also in process of analysing feedbacks received
from stakeholders to further liberalise the defence sector.
Currently, 26 per cent FDI is allowed in defence
manufacturing.