FDI increases to 8-month high at $3.6 billion in May

Foreign direct investment (FDI) in India increased to 8-month high at $3.6 billion in the month of May 2014 as compared to $1.63 billion in the same month of previous year. During the April-May FY15, FDI jumped by 34 percent to $5.30 billion from $3.95 billion recorded in the corresponding period of the previous fiscal.  

The sectors that received highest inflows during the month May include telecommunications ($1.51 billion), pharmaceuticals ($680 million), services ($574 million) and construction ($221 million). Country wise, maximum FDI during the month May was received form Mauritius with $2.28 billion followed by Singapore ($982 million), UK ($545 million), Japan ($319 million) and the US ($154 million). During FY14, FDI increased by 8 percent to $24.29 from $22.42 billion recorded in the FY13.

India would require around $1 trillion in the 12th five year plan (2012-2017) to overhaul its infrastructure sector such as ports, airports and highways to boost growth. However, to attract maximum FDI into the country, the government has been liberalizing the foreign investment policy. The government has relaxed FDI norms in around 12 sectors which include telecom, tea, pension and petroleum and natural gas. Recently, the government has raised the foreign investment limit to 49 percent in defence manufacturing and relaxed the policy in construction sector. It has also proposed to increase the FDI cap in insurance sector to 49 percent.