Foreign direct investment (FDI) has slumped by 41 per cent to $1.85 billion in April this year as compared to $3.12 billion in April, 2011.
Officials in the Commerce and Industry Ministry attributed the decline in FDI inflows to the overall poor global economic scenario but said there was a crying need to initiate big-ticket reforms in various sectors to send across a positive signal to investors that Indian economy was a safe and attractive destination for investments. Reforms such as allowing 51 per cent FDI in multi-brand retail and 49 per cent in domestic air carriers; and opening up pension and insurance sectors have been hanging fire for long.
India’s growth has already slipped to a nine-year low of 6.5 per cent, and is likely to go down further in the absence of any substantial reforms. The growth in the January-March quarter was merely 5.3 per cent.
Interestingly, in March, the country received the highest-ever monthly inflow of $8.1 billion. Earlier, the highest FDI of $5.65 billion was received in June last year. Cumulative FDI inflows for the fiscal 2011-12 amounted to $36.50 billion.
The sectors which received large FDI inflows in April include services ($449 million), pharmaceuticals ($359 million), construction ($120 million) and power ($68 million), officials in the Department of Industrial Policy and Promotion (DIPP) said.
In April 2012, India received highest FDI from Mauritius ($633 million), U.K. ($366 million), the Netherlands ($357 million), Singapore ($146 million) and Cyprus ($69 million). The inflows had aggregated $19.42 billion in 2010-11, down from $25.83 billion in 2009-10.