Seeking foreign investments in the rural sector, government today said India's villages were "ripe" for profitable ventures, especially in areas of infrastructure development and services.

"Foreign investors would find the rural areas ripe for profitable investments. The real potential for FDI lies in rural infrastructure and services sectors," union minister for rural development C P Joshi said.

Addressing an international conference organised by ASSOCHAM here on 'Rural India - Potential Hub for FDI', the minister said villages hold immense potential especially in areas of housing, food processing, solar energy and support infrastructure.

Joshi noted that FDI inflows into India during 2009 crossed Rs 80,000 crores and this was the highest ever in rupee terms.

"Even though FDI flows have increased significantly, we must continue to promote India as prime FDI destination," he said.

The attractiveness of India for FDI is far from receding and can surely be expected to sustain over the next decade as well, he added.

The minister said that India primarily remains an agrarian economy with 70 per cent of population and 94 per cent of the land mass in rural areas, underlining that potential for private investment including FDI in rural areas has remained untapped for "far too long".

Rural housing is an area where private investment could be "most valuable", he said pointing out that a shortage of about 47.43 million houses in rural areas has been estimated in the 11th Five Year Plan.

"Eleventh Five Year Plan has estimated shortage of a total 73.96 million housing units, of which 47.43 million units pertain to rural housing alone. This is an areas where private investment would be most valuable," he said.

The central government has launched certain key programmes which aim at overcoming the "physical and social infrastructure problems" faced in the rural development, he added.

The minister said India's "strong" agricultural base and "accelerating" economy growth holds a "significant" potential for the food processing industry which provides a strong link between agriculture and consumers.

"Government has accorded a high priority to the sector and has provided many fiscal incentives. In addition to FDI in the food processing industry, there is huge requirement for support infrastructure. FDI could play a major role," he added.

Seeking to reach out to non-resident Indians (NRIs) for investment in rural sector, Joshi said they are also an "important source" of FDI.