Sri Lanka gets most FDI from India in 2010

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COLOMBO, April 19 (LBO): India was the largest source of foreign direct investment to Sri Lanka in 2010 with 110 million US dollars followed by Malaysia with 72 million US dollars and the United Arab Emirates 66 million dollars, the Central Bank said. Telecoms continued to lead FDI, the central bank said. Malaysia's Axiata, which owns Sri Lanka's Dialog Axiata, has been a top source of FDI to Sri Lanka. UAE's Etisalat has also bought into the telecom sector. India's Airtel also owns a mobile firm. Sri Lanka's foreign direct investment in 2010 was 516 million US dollars in 2010, including 39 million US dollars in loans, down from 601 million US dollars a year earlier, the central bank said. There was also 43 million dollars of outward investment by Sri Lankan firms, up from 20 million dollars a year earlier. This reduced the net FDI figure in Sri Lanka's balance of payments (without third party loans) to 435 million US dollars, which was higher than the 384 million US dollars recorded a year earlier. "It is necessary for Sri Lanka to attract more non debt creating foreign investment flows if it is to increase the level of investment required to maintain the envisaged economic growth path, given the shortfall in domestic savings," the central bank said. "Creating a business friendly environment is needed to improve investor confidence and attract foreign investments." "While the recent relaxation of exchange control regulations, a strengthened macroeconomic environment as well as the re-establishment of peace in the country incentivise investment, further steps need to be taken to encourage foreign investments."