FDI in services sector up by 55%

According to experts,the uncertain economic conditions in the western markets are creating opportunities in emerging economies like India.

“Foreign investors are looking at India as western markets are reeling under debt crisis,” KPMG Executive Director Krishan Malhotra said.

Overall FDI inflows during the two months of the current financial year jumped by 77 per cent to USD 7.78 billion from USD 4.39 billion in the same period of previous fiscal.

The Commerce and Industry Ministry had said that the recent trend of dip in FDI inflows appears to have been reversed in the current financial year.

However in 2010-11,foreign investment in the services sector,which contributes over 50 per cent in India’s GDP,declined to USD 3.29 billion from USD 4.39 billion in 2009-10.

Despite the increase in FDI in services sector,drugs and pharmaceutical segment with USD 2.94 billion topped the chart in attracting maximum investment during the two months of current fiscal.

Power was the third best sector,attracting USD 582 million investment,followed by automobile (USD 412 million),construction (USD 252 million) and housing and real estate (USD 249 million),the data said.

During the period,the highest FDI of USD 2.46 billion came from the UK,followed by Mauritius (USD 2 billion),Singapore (USD 1.35 billion) and Japan (USD 367 million).

The government is making sustained efforts,including involving stakeholders in policy formation,to make the investment regime more attractive and investor friendly.

The government is considering liberalising FDI regime in sectors like defence and multi-brand retail.