FDI inflows in April-August surged by 95% to $17.37 billion

29 Oct 2011 Evaluate

Despite the slowdown in global economy, Foreign Direct Investment (FDI) in India jumped by 95% in the first five months of the 2011-12. According to the ministry of commerce and industry’s data, FDI in April-August 2011 stood at $17.37 billion as compared to $8.887 billion during April-August 2010.

In the first seven months of the current calendar year, foreign investments surged by 50% to $20.76 billion compare $13.85 in the same period of last year. On month-on-month basis, FDI in August stood at $2.83 billion compare to $1.099 billion in July. July’s FDI inflow was the lowest figure in 2011-12, which indicate the slowdown in the global economy has affected the pace of capital inflow.

However, experts have the view that the government should further streamline polices and make the environment more conducive to the overseas investments. In order to attract foreign investment, the government had relaxed FDI norms. The government had also relaxed norms for FDI in construction of old age homes and educational institutes and without lock in period rules.

The major sectors attracting overseas investment in the country are service (financial and non financial services), Telecommunication, housing and real estate and power sector. The major investing countries are Mauritius, Singapore, the US, the UK, the Netherlands, Japan, Germany and the UAE.

From last two financial years, India has been experiencing decline in FDI inflows, for 2010-11. India received FDI around $19.42 billion in 2010-11 compare to $25.83 billion in 2009-10, which is almost 25% decline. FDI inflows in 2008-09 were around $27.33 billion.