Mumbai: The Reserve Bank on January 25 said efforts should be made to attract more Foreign Direct Invest-ment (FDI) in the country, as they are more stable than portfolio investments.
These remarks come a day after the central bank said that environment-sensitive policies are hurting FDI in mining, township and ports sector. “The composition of capital inflows needs to shift towards longer-term commitments, such as FDI (Foreign Direct Investment),” the RBI said in its third quarter monetary policy review.
The Reserve Bank said the capital flows into India may be adversely affected on rebound into the global economy.
“Faster than expected global recovery may enhance the attractiveness of investment opportunities in advanced economies, which may impact capital flows to India. This may increase the vulnerability of our external sector,” RBI said.