India’s foreign direct investments (FDI) in the services sector increased by a mere 5 per cent to $3.6 billion during the April-October period this fiscal, as against $3.42 billion for the financial and non-financial services sector during same period of last fiscal. However, the overall FDI inflows has declined by about 27 per during the first seven months of the ongoing financial year to $14.78 billion, from $20.29 billion in the year-ago period. In 2011-12, foreign investment in the services sector which contributes over 50 per cent to India’s GDP rose to $5.21 billion from $3.29 billion in 2010-11.
Meanwhile, sectors that enticed higher FDI during the period under review include hotel and tourism ($3.11 billion), metallurgy ($1.21 billion), construction ($691 million) and automobile ($743 million). Meanwhile, country-wise, high levels of FDI during the period came from Mauritius $6.75 billion, Japan ($1.52 billion), Singapore $1.24 billion, the Netherlands ($1.05 billion) and the UK ($611 million).
According to DIPP, the government is making sustained efforts like including stake holders in policy formation to make the policy the investment regime more attractive and conducive for the investors. Foreign investments are a vital part of India and currently the country requires over $1 trillion by 2017 to overhaul its infrastructure sector such as ports, airports and highways to boost growth.
Apart from increasing the limit to 100 per cent in the single brand retailing, the government has also allowed FDI in multi-brand retail sector. The government has made 30% mandatory sourcing from small and medium enterprises of India for the foreign players in case of FDI in multi-brand retail.
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