Concerned over the decline in foreign direct investment and slowdown in manufacturing sector growth, Commerce and Industry Minister Mr Anand Sharma has called a meeting with industry chambers to review the bottlenecks.

Mr Sharma who was given the additional responsibility of the textiles portfolio in a cabinet will meet leaders from FICCI and the CII. He said that "Issues relating to FDI inflows, manufacturing and other industry concerns will be discussed in the meeting.”

Foreign direct investment flows into India declined by 25% to USD 19.42 billion in 2010-11 from USD 25.83 billion in 2009-10. In 2008-09, the country attracted FDI worth USD 27.33 billion.

India is the only major country in South Asia where FDI inflows fell during 2010.

The country's industrial production, too, fell to 5.6% in May this year from 8.5% in the same month last year, mainly on account of the poor performance of the manufacturing sector. The rising cost of borrowings amid high global commodity prices has started hitting the industry. The 1.62% growth in car sales recorded in June was the slowest in 27 months. The Reserve Bank has effected an increase of 250 basis points in the benchmark interest rates since March 2010.

The manufacturing sector, which accounts for over 75% of the total weight of the Index of Industrial Production grew by just 5.6% in May, 2011, as against 8.9% in the same month of 2010.

Factory output in April as measured by the IIP, has also been revised downward to 5.7% from the earlier estimate of 6.3% as per the new series with a base year of 2004-05.

(Sourced from www.financialexpress.com)