India has reiterated that it welcomes foreign direct investment, but investment for mere acquisitions does not excite it.

Inaugurating the OECD-India Investment Roundtable in New Delhi on Tuesday, Minister of Commerce and Industry Kamal Nath said: "What we really want is FDI that generates the maximum economic activity, and, thereby creates employment that creates wealth for the people."

"We especially look to FDI in manufacturing sectors and in greenfield projects." The roundtable is organised jointly by OECD, the Government of India and the Confederation of Indian Industry.

Saying that India's investment policies, including policies on FDI are among the most liberal in developing economies, he said, "Foreign investors would find a very conducive atmosphere in India. While all kinds of FDI is always welcome, our very comfortable foreign exchange reserves means that the investments for mere acquisitions do not excite us."

Stating that there is now a newfound confidence and resilience among the Indian industry, which is outward looking, Kamal Nath said that overseas investments by Indian companies have exceeded $3 billion in the last two years, with nearly 60 per cent in the manufacturing sector. He informed that the telecom sector in India was amongst the fastest growing in the world today, with the number of mobile phones increasing at over 50,000 each day.

"While the software prowess of Indian manpower has come into sharp focus, our manufacturing skills, particularly in high precision, high-tech sectors have not received adequate attention from foreign investors," he commented.

He said that most of the top vehicle manufacturers and their suppliers were sourcing high-quality auto components from India.

In an effort to make India the most favourable investment destination, he said that a Bill on Special Economic Zones would be introduced in Parliament by the end of this year, which will include Bio-Technology parks and Free Trade and Warehousing Zones.

In all these, FDI up to 100 per cent would be permitted, including in the real estate development and establishment of the zones.

Referring to outsourcing, the minister said that it was a win-win situation for all in this era of globalisation. "India benefits no doubt but so do the foreign companies." He said: "We should seek out more innovative areas for outsourcing and benefiting from the comparative advantage and complementarities of our economies."

He said that the medical expertise and para-medical skills available in India make it an ideal place for pharmaceuticals and clinical research.

He exuded confidence that India would become one of the largest economies in the world over the next two decade and establishing a strong presence in India, therefore, would be a strategic necessity for business corporations.

Speaking on the occasion, Richard Hecklinger, Deputy Secretary General, OECD, said that perceptions about India was changing fast and commented that there was a great potential for cooperation between India and OECD, especially in the area of investment-related policies, which have emerged as a priority in advancing "our mutually beneficial dialogue".

Hecklinger said that India had come to be seen as an economic powerhouse, an increasingly attractive host for investment and, last but not the least, a country that had itself become a source of outward investment.

However, Hecklinger pointed out that India's economic growth was constrained by infrastructure inadequacies and commented that there was also room for improvement in other areas of human development such as health and education.

"Improvement in these indicators depends on continued economic growth, which in turn depends on the easing of bottlenecks in infrastructure and energy," adding, "investment therefore has a vital part to play in ensuring the continuation of rapid economic growth."

Dhruv Sawhney, past president, CII, in his welcome address, said that India was going through a dynamic change. There is a new found confidence in Indian industry and the industry was looking to build Indian MNC's abroad.