Despite the ongoing debt crisis in European economies and slowdown in United States, foreign direct investment in India surged by 74% to $19.13 billion in the first half of current financial year compared to $8.6 billion in the same period of the last year.
During January-September 2011, FDI in India surged by 41% to $22.5 billion compared to $15.97 billion in same period of corresponding year. However, FDI in September 2011 saw decline, it stood at $1.766 billion compared to $2.83 billion in August, which indicates that the capital inflow was affected by the financial crisis in western economies.
Despite the impressive surge in FDI inflows in the current financial as well as calendar year, experts maintain that the government should further rationalize efficient policies and make the environment more conducive to foreign investments.
The government, recently, relaxed FDI norms and allowed foreign investment in bee-keeping and share-pledging for raising external debt. Along with this, the government also relaxed conditions for FDI in construction of old-age homes and educational institutions. These investments will not be subject to minimum and buildup area, capitalization and lock-in period norms as applicable for the construction activities.
As per the latest data, sectors such as services (financial and non- financial), telecom, housing and real estate, and construction and power sectors, attracted maximum FDI in current financial as well as calendar year. Mauritius, Singapore, the US, the UK, the Netherlands, Japan, Germany and the UAE are the major investors in India. The FDI inflows recorded a decline of 25% to $19.42 billion in 2010-11 from $25.83 billion in 2009-10.