"The trade offices of the states can help provide updates on the new policies and initiatives of the state governments. These offices can also present success stories and interesting case studies to attract more investments.
If the Indian states are really serious about attracting more foreign direct investments, this can be a viable option," he said in Chennai.
He said India faces many challenges in attracting investments. "The challenges are not micro issues but macro issues like infrastructure, which needs to be put on a war-footing," he said.
According to statistics, the US is the largest investing country in India, accounting for around 21 per cent of all FDI approved from 1991 to April 2004, amounting to a total of over $16.5 billion.
Three southern states -- Tamil Nadu, Karnataka and Andhra Pradesh -- were among the top five states in attracting FDI, according to ministry of commerce and industry statistics.
Maharashtra topped the table at Rs 3,63,584 million (Rs 3635.84 crore) worth of proposals approved during August 1991 to June 2004, followed by Delhi at Rs 2,92,803 million (Rs 2928.03 crore), Tamil Nadu at Rs 2,25,469 million (Rs 2254.69), Karnataka at Rs 1,86,745 million (Rs 1867.45 crore) and Andhra Pradesh at Rs 1,14,717 million (Rs 1147.17 crore).