After touching record highs in the morning trade, Indian markets witnessed some selling momentum to trade flat. Losses are largely seen in capital goods stocks and pharma stocks.
The BSE Sensex is trading lower by 17 points and the NSE Nifty is trading lower by 5 points. The BSE Mid Cap index is trading up by 0.4% while the BSE Small Cap index is trading flat. The rupee is trading at 64.44 to the US$.
In news from economic sector, amid the concern of country’s growing trade deficit with China, the foreign direct investment (FDI) inflows into the country increased 23% YoY in the first two months of the current fiscal.
The cumulative foreign direct investment in April-May was US$10.02 billion, or about Rs 645.24 billion, compared with US$8.12 billion, or about Rs 522.89 billion, a year earlier.
Commerce and industry minister Nirmala Sitharaman pointed that the government has put in place an investor-friendly policy for FDI and except for a small negative list most sectors are open for 100% FDI. She added that the government reviews FDI policy on an ongoing basis with a view to liberalise and simplify the policy to provide ease of doing business in the country leading to larger FDI inflows.
While talking about the trade with China, the minister said that trade deficit with China is a matter of concern. She further said that efforts are being made to increase overall exports by diversifying the trade basket with emphasis on manufactured goods, services, resolution of market access issues and other non-tariff barriers. India’s trade deficit with China in 2016-17 had declined slightly to US$51.08 billion, from US$52.69 billion in 2015-16. It was at US$48.48 billion in 2014-15.
Rising Foreign Direct Investments Augurs Well for India
Foreign Direct Investments (FDI) plays an important role in the economic development of a country. It is a source of long term capital that helps build critical infrastructures in the economy. It also aids in technology knowledge transfers, fosters innovation and helps raise productivity too. In short, having a steady flow of FDI inflows would help India to achieve necessary investments that will help accelerate economic growth and development.
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