Last year, the FDI flow was $8.4 billion, secretary in the department of industrial policy promotion, Ajay Dua said.
He said during the current year, out of the $12 billion, $8 billion was expected to come in the form of equity and the balance from re-invested earnings and other capital inflows.
Speaking at the Bengal National Chamber of Commerce in Kolkata, Dua said countries like Taiwan, Japan and South Korea would be investing in India in a big way. According to him, the three nations would bring huge FDI inflows in the country.
A few Taiwanese firms were already in the process of setting up manufacturing units in India, he said. However, Dua said the US was the largest contributor, followed by European Union states and the Netherlands.
He said that the government was also simplifying procedures as well to boost FDI inflow. To make processes simpler, Dua said the industry department was in the process of introducing e-biz, which would enable domestic and overseas investors to file information at a single point.
He said this information would be circulated electronically to the all the departments concerned, adding this would also cut down the interface between government officers and investors.
The project would be in place by March 2007. With the signing of Comprehensive Economic Cooperation Agreement with Singapore, the government is also expecting a large FDI flow routed through that country.
He said till now, 35 per cent of FDI flows were routed through Mauritius since India had double taxation avoidance treaty with that country.
On FDI in retail, he said the government stand was that it would not be allowed in the form, which could displace traditional shopkeepers. The idea is to see where it could meet the incremental needs of the consumers, he said.