New Delhi: With economic recovery in the rich countries remaining fragile, foreign direct investment (FDI) inflows to India dipped for the second consecutive month, falling by about 7% to $1.6 billion in November 2010 over the same period last year, reports PTI.
In November 2009, FDI stood at $1.72 billion.
During the first eight months of 20010-11, India received FDI worth $14.02 billion, a decline of 27.4% over the corresponding period of previous year, an official told PTI.
During April-November 2009-10, the foreign inflows stood at $19.32 billion.
The inflows remained low despite a recent World Bank study stating the FDI flows into developing countries, including India, is expected to recover over the next couple of years.
“The sluggish and fragile financial recovery in the US and Europe could be one of the reasons for slowdown in FDI in India,” the official said.
CRISIL’s principal economist DK Joshi said FDI inflows are “lumpy in nature” and keep fluctuating on monthly basis.
After rising in September 2010, FDI inflows in October 2010 dipped by about 40% to $1.4 billion from $2.3 billion in the same period last year.
The inflows in September 2010 were up by 40% from the same month last year.
However, the government is making efforts to attract more and more FDI into the country. It is considering liberalising FDI in defence and multi-brand retail sector.
The main sectors which attracted foreign direct investment include services (financial and non-financial), telecommunication, housing and real estate, construction activities and power.
Countries including Mauritius, Singapore, the US, UK, Netherlands, Japan, Germany and UAE are the major investors in India.
FDI for 2009-10 at $25.88 billion was also lower by 5% from $27.33 billion in the previous fiscal.