FDI in services sector drops 54% in 2013-14

Tags: FDI, Economy
Foreign direct investment in the services sector declined by about 54 per cent year-on-year to $2.22 billion last fiscal, according to data from the Department of Industrial Policy and Promotion.

The services sector, which includes banking, insurance, outsourcing, R&D, courier and technology testing, had received FDI worth $4.83 billion during 2012-13.

The services sector accounts for over 60 per cent to India's GDP.

FDI inflows have also declined in sectors including construction development and hotel and tourism.

Foreign investments are considered crucial for India, which needs about $1 trillion in the 5-year Plan period ending March 2017 to overhaul infrastructure such as ports, airports and highways and boost growth.

The decline in foreign investments could affect the country's balance of payments and the rupee.

Overall foreign inflows into the country grew by 8 per cent to $24.29 in the last fiscal as against $22.42 billion in 2012-13.

To further attract foreign inflows, the government is planning to relax FDI policy in sectors such as defence, railways and construction activities.

The DIPP has already circulated a draft Cabinet note to raise FDI cap in defence to 100 per cent.

Further, Singapore has replaced Mauritius as the top source of FDI into India, accounting for about 25 per cent of FDI inflows in 2013-14.

EDITORIAL OF THE DAY

  • Reservations, along with economic subsidies, must go to get India moving

    A young man, in his early twenties, starts an agitation demanding reservation for the community he represents.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

Sarthak Raychaudhuri

vice-president, HR, Asia South Whirlpool of India

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

TODAY'S COLUMNS

Urs Schoettli

The China story isn’t over yet

China’s financial markets are currently in the eye of a ...

Anuja Sharma

Love yourself to love others

“There are two basic motivating forces: fear and love. When ...

Gautam Gupta

It's a 'blog eat blog' world out there

Let me tell you, fashion journalism has truly taken the ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture