The Department of Industrial Policy and Promotion in its latest release has reported that Foreign direct investment (FDI) in Indian services sector, which contributes over 60 percent of the GDP and includes banking, insurance, outsourcing, R&D, courier and technology testing, rose marginally to $1.03 billion during the April-July period of the ongoing fiscal, compared to $1.02 billion during the first four months of the previous fiscal, 2013-14.
Although, the overall FDI during April-July this fiscal has jumped by 52 percent to $ 10.73 billion, the FDI in the services sector had fallen to $2.2 billion from $ 4.83 billion in 2012-13. The government is taking steps to boost inflows into the sector and has decided to raise FDI limit to 49 percent in the insurance sector from the current level of 26 percent, as the decline in foreign investments could affect the country's balance of payments and the rupee, also as India needs around $1 trillion over five years (2012-17) to overhaul its infrastructure sector.
The other sectors which received high foreign investment during the first four months of this financial year include telecommunication, construction, computer software and hardware and power. The FDI flows into India more than doubled to $ 3.5 billion in July, as compared to $1.65 billion in the same month last year. In this fiscal, during April-July period the foreign inflows grew to $10.73 billion as compared to $7.05 billion in the same period last year.