Foreign direct investment (FDI) in India has declined by six per cent to USD 5.47 billion during January-March quarter of the current calendar year even as government is making efforts to promote the country as an investment destination.
FDI inflows were worth USD 5.84 billion in January-March 2012.
During the quarter, highest FDI of USD 2.15 billion was received in January followed by USD 1.79 billion in February and USD 1.52 billion in March, according to the Department of Industrial Policy and Promotion (DIPP) data.
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The government had taken several decisions to attract foreign investments. It has liberalised FDI policy in sectors like multi-brand retail, civil aviation, broadcasting and power exchanges and is seeking legislative approval for increasing FDI cap in insurance and pension sectors.
According to industry experts, there is a need to improve business environment in the country to boost FDI.
Sectors which received large FDI inflows during the period include services, hotel and tourism, metallurgical, construction, automobiles and Pharmaceuticals.
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India received maximum FDI from Mauritius, followed by the UK, Singapore, Japan and United States during the period.
Decline in foreign investments could put pressure on the country’s balance of payments and may also impact the value of the rupee.
It is estimated India would require around USD 1 trillion in the next five years to overhaul its infrastructure sector such as ports, airports and highways to boost growth.
Economic growth slipped to a decade low of 5 per cent in 2012-13 due to poor performance of farm, manufacturing and mining sectors.