India's capital challenge
India's favourable business environment has attracted the attention of foreign investors.
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Net capital inflows more than double from $25 billion in 2005 to $66 billion in 2007(Jan-Feb), and these are projected to remain significant, reflecting India's continued strength at a time when the world economy is weakening.
However, capital inflows caused the rupee to appreciate 12 per cent last year, raising concerns about the country's competitiveness, particularly in labour-intensive industries.
