However, we are far behind China and other developed countries in terms of the volume of FDI. India's FDI inflow was $5.33 billion in 2004 compared to 60$ billion of China, $96 billion of US and $ 78 billion of UK. Of the total flows of $148 billion to Asia, China alone took in $60.6 billion in 2004.

That we are far behind China in FDI is not a new thing, which the report has indicated. There are a number of factors responsible for this. We have opened up our economy after China. Secondly the process of the liberalisation has been very slow. The bureaucratic mind-set and red tapism has been changing very slowly. As a result while other Asian countries have marched ahead we continue to limp.

Given the fact that government now aims to attract $150 billion in next decade, it is necessary to step up the efforts. The government needs to further open up sectors such as petroleum, retailing, insurance, real estate and construction for FDI. It is pertinent to note that FDI is the most preferred the form of investment for any economy because it comes with long-term commitments, unlike investment made by foreign institutional investors in the capital market which comes and goes depending on the rate of return.