Foreign direct investment (FDI) into India went up by as much 56% to $2.53 billion in November 2011, signalling improvement in investor sentiment.
Cumulative flows for the April-November period stand at of $22.83 billion, surpassing $19.43 billion achieved in the full financial year 2010-11, according to officials.
Analysts feel that if the trend continues, the FDI in the current financial year would well cross $30 billion, a development which will have a positive effect on rupee in the foreign exchange market.
In the face of selling pressures in the stock market from the foreign institutional investors and rising trade deficit, the rupee has declined by about 15% since August.
While the FII inflows are considered "hot money", the FDI is quite stable.
The improvement in FDI inflows in November comes after two months of declining trend. The country had received $1.62 billion overseas investment in November 2010.
In September and October, the inflows were down by 16.5% and 50% year-on-year respectively.
During the April-November period, the FDI was up by 62.81% from $14.02 billion a year ago.
"At this rate we would be able to cross $30 billion figure by end of the current fiscal," the official added.
In 2010-11, FDI into equity had dipped 25% to $19.43 billion, from $25.6 billion in 2009-10. In 2008-09, FDI stood at $27.3 billion.
Mauritius, Singapore, the US, the UK, the Netherlands, Japan, Germany and the UAE are major sources of FDI for India.
Sectors which attracted the maximum funds include services, construction activities, power,computers and hardware, telecom and housing and real estate.