After contracting for three consecutive months, Foreign Direct Investment (FDI) inflows expanded by 54.66 per cent in January 2009, as overseas companies pumped $2.73 billion against $ 1.76 billion in the same month a year ago.
FDI inflows had dipped for three months till December, 2008, against the backdrop of the global financial crisis, as overseas companies either postponed or cancelled investment plans (see table). In January last year, FDI inflows had contracted 8.33 per cent ($1.92 billion).
| FAINT HOPE (FDI inflows from April 2008 to January 2009) | ||
| Month | FDI ($ bn) | Growth (%) |
| Apr | 3.74 | 128.18 |
| May | 3.93 | 85.48 |
| Jun | 2.39 | 93.21 |
| Jul | 2.24 | 218.72 |
| Aug | 2.32 | 180.14 |
| Sep | 2.56 | 259.32 |
| Oct | 1.49 | -26.14 |
| Nov | 1.08 | -41.9 |
| Dec | 1.36 | -12.6 |
| Jan | 2.73 | 54.67 |
| Source: RBI | ||
Experts, however, do not see reason to cheer. “The latest FDI figures may not indicate sustained growth in FDI. The increase in the month could be because of commitments made by overseas companies before the global financial crisis,” said Indranil Pan, chief economist with Kotak Mahindra Bank.