The services sector which contributes over 60 per cent to India’s GDP is witnessing good interest from the foreign investors due to different government steps to improve the ease of doing business and attract foreign investments. Foreign direct investment (FDI) inflows into the services sector grew by 44 per cent to $ 2.29 billion in the April-December period of the current fiscal, as compared to $ 1.59 billion during April-December, 2013-14.
As per the data of Department of Industrial Policy and Promotion (DIPP), Services sector FDI that had fallen to $ 4.83 billion in 2012-13 from $ 5.21 billion in 2011-12 has been improving since then as the government is focusing on enhancing services exports.
The overall foreign inflows in the country rose by 27 per cent to $ 21.04 billion during the first nine months of 2014-15, compared to the amount of $16.56 billion in the year-ago period. Sector wise telecom attracted FDI worth $ 2.67 billion, automobile $ 1.58 billion and power $ 576 million.
The government has announced a series of steps such as fixing timelines for approvals to improve ease of doing business in the country and to attract domestic and foreign investments and has raised the FDI cap in insurance sector to 49 per cent from 26 per cent, along with policy relaxation in other sectors such as defence, railways and medical devices.