Foreign direct investment (FDI) into India went up by an impressive 56 per cent to $2.53 billion in November 2011, signaling improvement in investor sentiment.
The cumulative flows of $22.83 billion for April-November have crossed the $19.43 billion in 2010-11, according to officials. Analysts said if the trend continued, FDI in the current financial year would well cross $30 billion, a development that will have a positive effect on the rupee in the foreign exchange market.
In the face of selling pressures in the stock market from foreign institutional investors and a rising trade deficit, the rupee has declined by about 15 per cent since August. The improvement in FDI inflows in November comes after two months of a 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 per cent and 50 per cent year-on-year, respectively.
During the April-November period, FDI was up by 62.81 per cent 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 per cent 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 that attracted the maximum funds include services, construction activities, power, computers and hardware, talcum and housing and real estate.