| Date: |
25-10-2010 |
| Subject: |
Macroeconomic Indicator - FDI Inflows Plunge by about 60pct |
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It is reported that foreign direct investment in August dipped by about 60% to USD 1.33 billion, the lowest in this fiscal.
Industry department data released showed that the FDI inflows in August 2009 were USD 3.26 billion. During the first five months of 2010-11, the inflows declined by 35% to USD 8.88 billion compared to USD 13.76 billion in the same period last year.
Contrary to smart recovery in the domestic economy and a rebound in exports, overseas investment in form of equity inflows are on decline since June.
The overseas investment in June was at USD 1.38 billion, while that in July was USD 1.78 billion. The FDI in the first two months of this fiscal, April and May was USD 2.17 billion and USD 2.21 billion respectively.
Mr DK Joshi chief economist of Crisil said that India provides good opportunities for growth and the declining trend will not continue. He said that "FDI inflow has to pick up in long run but given the uncertainties in the global economy it is difficult to predict from when it will improve.”
A recent UNCTAD survey projected India as the second most important FDI destination (after China) for transnational corporations during 2010-2012.
As per the data, the sectors which attracted higher inflows were services, telecommunication, construction activities and computer software and hardware.
Source : steelguru.com
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