Supported by government’s various initiatives to improve ease of doing business, Foreign Direct Investment (FDI) into the country’s services sector increased by 77.6 percent to $7.55 billion during April- December 2016-17, as compared to $ 4.25 billion in the same period last year. Moreover, the overall foreign inflows in the country increased by 22 per cent to $35.84 billion during April-December 2016-17.
Indian services sector, which includes banking, insurance, R&D, outsourcing, courier and technology testing, represents over 60 per cent share in the country’s GDP and accounts for 17 per cent of total foreign investment inflows. The Commerce and Industry Ministry is also considering relaxing FDI norms in certain sectors including retail to further boost inflows. The other sectors where inflows recorded growth during the nine-month period of 2016-17 were telecom, which saw an inflow of $5.54 billion, trading $2 billion, computer software and hardware $1.81 billion and automobile at $1.45 billion.
FDI is considered crucial for economic development of a country and to attract maximum FDI into the country, the government has been relaxing the foreign investment norms in various sectors. At present, the Commerce and Industry Ministry is also considering relaxing FDI norms in certain sectors including retail to further boost inflows. Meanwhile, India needs around $1 trillion to overhaul its infrastructure sector such as ports, airports and highways to boost growth.