Foreign direct investment into India has surged to over $25 billion in 2007-08 and the country's foreign exchange reserve crossed $341 billion as of Tuesday, Ashwani Kumar, minister of state for commerce and industry has said.
Addressing the two-day India Investors' Summit organised by Financial News in association with Dow Jones and The Wall Street Journal in London, Ashwani Kumar highlighted the initiatives of the United Progressive Alliance government in making growth more inclusive and the emphasis laid on education and health in the context of providing skills and better quality of life.
He said the next wave would be in the skill-based manufacturing sector.
Nearly 500 delegates from business and industry registered for the event which discussed the current social, financial and economic dynamics of doing business with India.
Ashwani Kumar gave a background to the reform process in India and the key drivers of India's growth.
To support his argument of the sustainability of GDP growth of over 8 per cent in the long run, he observed that India had the advantage of a huge young workforce (24 per cent of the population are below the age of 28 years, 54 per cent of the population are in the working group) and a very high savings and investment rate (over 35 per cent of GDP).
Domestic demand and investment are the key drivers of growth and therefore insulate the Indian economy to a large extent from the sub-prime crisis.
Inflation, though a major concern, could be contained. The growth potential of services sector in India was enormous at $200 billion offering employment to 40 million people, he said.
Kumar was positive about sustainability of India's growth saying no reform measure had been reversed even though six different government had been in office after the reform process began.
Lord Mayor of the City of London, David Lewis, who had visited India recently, was very optimistic about the growth prospects of India but felt that liberalisation of the Indian financial and legal services sectors could have been faster.
The High Commissioner of India to the UK Shiv Shanker Mukherjee and the UK minister of State for Trade and Investment, Lord Digby Jones, also addressed the gathering.
The summit concluded on Tuesday.