Foreign direct investment into India grew for the second consecutive month in February this year to $2.01 billion, up 12.29 per cent. In February 2013, the FDI was at $1.79 billion according to the data by the Department of Industrial Policy and Promotion.
However, for the April-February period of last fiscal, FDI inflows dipped 0.6 per cent to $20.76 billion, from $20.89 billion during the first 11 months of 2012-13. The highest FDI came in services ($2.18 billion), followed by automobiles ($1.28 billion), pharmaceuticals ($1.27 billion) and construction development ($1.05 billion) in the 11 months of 2013-14.
Mauritius led the inflows into India with $4.48 billion, followed by Singapore ($3.91 billion), UK ($3.21 billion) and the Netherlands ($2.20 billion). In January 2014, FDI had increased 1.5 per cent at $2.18 billion. The country needs foreign investment to help regain its growth momentum. India’s economic growth slowed to a decade’s low of 4.5 per cent in 2012-13.
India is estimated to require about $1 trillion between 2012-13 and 2016-17, the 12th Five-Year Plan period, to fund infrastructure projects. A decline in FDI would hurt the rupee, which depreciated to a record low of 68.85 against the US dollar on August 28 last year. Since then the local currency has rebounded and is hovering at 61 per dollar.