Overseas investment in services drops 60 pc

Tags: FDI, Economy
Foreign direct investment (FDI) into the services sector declined by about 60 per cent to $1.59 billion in the first nine months of this financial year.

The services sector, which includes banking, insurance, outsourcing, R&D, courier and technology testing, had received FDI worth $4.04 billion in the April-December period of 2012, according to data with the Department of Industrial Policy and Promotion (DIPP).

An industry expert said foreign investors are waiting for the next government.

"Worldwide, foreign investors are eagerly waiting for elections. They want to take a call after the formation of the new government," said Krishan Malhotra, head of the tax division at corporate law firm Amarchand & Mangaldas.

The month-long general election will start on April 7, with polls staggered over nine stages.

With the drop in FDI in services, overall foreign inflows in the country dipped by 3 per cent to $22 billion during the nine-month period. Investments of $22.78 billion were made in April-December 2012.

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

Other sectors where inflows have declined include construction development, metallurgical industries and hotel and tourism.

Foreign investment is considered crucial for India, which needs about $1 trillion in the five years ending March 2017 to develop infrastructure such as ports, airports and highways and boost growth.

A decline in foreign investment could affect the country's balance of payments and the rupee.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • Amidst Sino-Indian bonhomie, the Tibet issue cannot be wished away

    Tibet did not figure in the three-day high-level meetings between India and the People’s Republic of China (PRC).

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Varun Dutt

<b>Riskfactor</b>: Intertemporal choices

Intertemporal choice is the study of the relative value people ...

Parvez Imam

Why we all have blood on our hands

What does the Jammu and Kashmir flood make us think? ...

Dharmendra Khandal

The peculiar possibilities of animal poop

You can tell a lot about an animal by its ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture