FDI up by 92% in January to $ 2 billion

NEW DELHI: India received $ two billion foreign direct investment in January, showing an annual growth of 92 per cent and taking cumulative inflows to $ 26.19 billion for April-January period of the current fiscal.

In January 2011, the country received foreign direct investment ( FDI) worth $ 1.04 billion.

Experts feel if reforms are pushed, there is much more potential for attracting increased foreign investment.

"There is an urgent need for strong reforms like 100 per cent FDI in sectors like multi-brand retail and insurance. There is a need to boost investor confidence. $ 2 billion in month is not a big number," Ficci Secretary General Rajiv Kumar said.

The sectors which received large foreign FDI inflows during the 10-month period this fiscal are: services ($ 4.83 billion), pharmaceuticals ($ 3.20 billion), telecommunication ($ 1.99 billion), construction ($ 2.23 billion), power ($ 1.56 billion) and metallurgical industries ($ 1.65 billion).

Mauritius remain the top source of inflows ($ 8.91 billion), thanks to the double taxation avoidance treaty.

Other sources were Singapore ($ 4.30 billion), Japan ($ 2.75 billion), UK ($ 2.75 billion), Germany ($ 1.46 billion), Netherlands ($ 1.16 billion) and Cyprus ($ 1.31 billion).

FDI inflows into India totalled $ 19.42 billion in 2010-11 financial year, down from $ 25.83 billion in 2009-10.

Recently, the government has liberalised the FDI regime and allowed overseas investment in bee-keeping and share-pledging for raising external debt.

Besides, the conditions for FDI in construction of old-age homes and educational institutions have been eased.

These will not be subject to the minimum and built-up area, capitalisation and lock-in period norms as applicable for the construction activities.