Jan 28, 2013, 09.14 AM | Source: PTI
Foreign direct investment (FDI) inflows into the services sector declined by about 14 per cent to USD 3.63 billion during the April-November period this fiscal.
"Global economic crisis is impacting the FDI inflows in the sector," an official said. As far as overall FDI inflows are concerned, they declined to USD 15.84 billion during the first eight months of the current financial year, from USD 27.92 billion in the year-ago period.
In 2011-12, foreign investment in the services sector, which contributes over 50 per cent to India's GDP, rose to USD 5.21 billion from USD 3.29 billion in 2010-11.
The other sectors which have received FDI during April- November, 2012-13 include hotel and tourism (USD 3.13 billion), metallurgy (USD 1.26 billion), construction (USD 1.01 million) and automobile (USD 760 million).
India received maximum FDI from Mauritius (USD 7.2 billion), Japan (USD 1.56 billion), Singapore (USD 1.5 billion) the Netherlands (USD 1.09 billion) and the UK (USD 615 million), the Department of Industrial Policy & Promotion (DIPP) data showed.
The government is making sustained efforts, including involving stakeholders in policy formation and to make the investment regime more attractive and investor friendly, the official said.
It has already allowed FDI in multi-brand retail sector besides hiking the cap to 100 per cent in the single brand retailing.
Foreign investments are considered crucial for India, which needs around USD 1 trillion in the next five years to overhaul its infrastructure sector such as ports, airports and highways to boost growth.
Decline in foreign investments could affect the country's balance of payments (BoP) situation and also impact the rupee.