The services sector (financial and non-financial services) had attracted FDI worth USD 4.39 billion during 2009-10.
According to experts, global financial problems, particularly in the European markets are making players cautious of undertaking overseas investments.
Mauritius, Singapore, the US, UK, Netherlands, Japan, Germany and the UAE, among other countries, are the major investors in India.
"The decline is manily because of global financial problems. There was a world wide downfall," global consultancy firm KPMG Executive Director Krishan Malhotra said.
However, Malhotra said that now the situation is improving globally and hopefully India will attract more FDI in 2011-12.
The services sector, despite the 22.5 per cent dip in FDI, topped the chart in attracting maximum investment.
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