Snapping a declining trend in FDI inflows for three successive months, India received foreign direct investment in India worth $2.11 billion in September, an increase of about 40 per cent over that in the same month last year, an industry ministry official said.
The FDI inflows in September 2009 were $1.51 billion.
FDI inflows so far this year is worth $38 billion.
The sectors which attracted foreign investment included services, telecommunication, construction activities and computer software and hardware.
The maximum investment came from Mauritius, the US, the UK, Singapore, the Netherlands and Japan.
The government has said that it was considering liberalising FDI in multi-brand retail and defence sectors.
For the April-September period of 2010-11, however, FDI inflows declined by about 28 per cent to $11 billion compared to $15.3 billion in the same period last year, the official told PTI.
According to an expert, weak global economic recovery is a reason for the dip in FDI inflows.
"Sluggish recovery in the major western economies is one of the reasons for declining FDI in India...," international trade expert with India's prestigious Indian Institute of Foreign Trade (IIFT) Rakesh Mohan Joshi said.
FDI inflows had been dipping for three months in a row before September.
In August FDI was down by about 60 per cent to $1.33 billion from that in the same month in the year-ago period. In July inflows were at $1.78 billion, a dip of 49 per cent; in June they were at $1.38, down 46 per cent.
The foreign investment remained low-key despite a recent UNCTAD survey showing that India would remain the second most important FDI destination for transnational corporations during 2010-2012, next only to China.
In its latest 'World Investment Prospects Survey 2010-2012', the United Nations Conference on Trade and Development (UNCTAD) said transnational corporations remain buoyant about investment prospects in China, India and Brazil.
FDI for 2009-10 at $25.88 billion was lower by five per cent from $27.33 billion in the previous fiscal.