FDI down 25% in April-Jan period

January figure plunges 48 per cent to $1.04 billion

FDI down 25% in April-Jan period

 Countries including Mauritius, Singapore, US, UK, Netherlands, Japan, Germany and UAE are the major investors in India.

In January 2010, India attracted foreign direct investment (FDI) worth $2.04 billion.
During the ten month period (April-January 2010-11) of the current fiscal, FDI declined 25 per cent to $17 billion over the year ago period, a source said.

India had received $22.9 billion FDI during April-January 2009-10. “The numbers are reflecting that, we will not be able to touch the FDI figure of the previous fiscal,” the source said adding that it is a matter of great concern. In 2009-10, the country’s foreign direct investment had declined to $25.88 billion from $27.33 billion in the previous financial year.

“The numbers are bad. Going by the trend, it appears that India will receive less FDI in 2010-11 compared to the previous fiscal. The global economic recovery is fragile,” Crisil Principal Economist D K Joshi said.

After falling consecutively in October and November 2010, in December last year, foreign direct investment in India increased by about 31 per cent to $2 billion over the same period last year. FDI inflows in October 2010 dipped by about 40 per cent to $1.4 billion over the year ago period. In November too, it fell by 7 per cent to $1.6 billion.

In view of declining foreign investment inflows, the Reserve Bank of India is considering setting-up a panel to find out the reasons for FDI slowdown and suggest ways to encourage it.

The sectors that attracted FDI include services (financial and non-financial), telecommunications, housing and real estate, construction activities and power. As far as FII inflows are concerned, they too dipped in January, declining to $1.19 billion from $1.84 billion during the same period of January, 2010.

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