According to an analysis of official statistics, CII said, in rupee terms, the inflows during the three months were Rs 60,160.5 million, which is 45 per cent of the total inflows of Rs 133,398.4 million during 1998.

Despite the prevailing political instability and the Kargil conflict, the country is seen as an attractive destination for FDI, said CII.

The recent survey, conducted by global management consultancy AT Kearney, bears out this fact as CEOs of the world's 1,000 top corporates have ranked India the sixth most-preferred destination for FDI. According to the survey, though India is ranked behind the USA, China, UK, Brazil and Mexico, India has moved ahead of Germany and Poland.

According to CII, three coreinfrastructure industries -- power, telecom and transportation -- were the top three sectors for FDI approvals during August 1, 1991 to January 31, 1999. These three sectors together have received 44 per cent of the total approvals, amounting to Rs 812,758.28 million, accorded since January 1991.

Overall, core sectors have taken up 57 per cent of FDI approvals amounting to Rs 1056411.90 million since 1991, said CII.

However, only 29 per cent of total FDI approved during January 1991 to January 1999 has actually materialised. The actuals to approvals ratio is too dismal and warrants urgent and immediate attention, said CII. In this regard, CII has welcomed the recent move of the government to address this issue by setting up the FIIA and said that it must be implemented.

CII has identified six factors which impede the poor implementation to approval ratio -- lack of clear-cut policies; lack of transparency; ad-hocism; absence of regulatory framework; contradictory and inconsistent policies and multipleclearances.

While the potential is substantial and India is a favoured destination, there is a clear need for strong time-bound, consistent and transparent policies with a clear regulatory framework, said CII.

Of the overall FDI inflow in the core sector, the manufacturing and mining sector accounted for 28 per cent amounting to Rs 531,525.77 million since 1991. While the services sector accounted for a share of 10 per cent in the total FDI inflows amounting to Rs 183,086.91 million, the agriculture and allied sectors have received only five per cent of the inflows amounting to Rs 89,042.76 million.

An interesting change in the origin of FDI inflows occurred in January-February 1999, with South Korea becoming the largest investor in terms of value of approvals. Since 1991, the US had been the largest investor in India.