Foreign Direct Investment (FDI) into the country’s services sector has declined by 47.5 percent to $1.19 billion during the April-August period of 2013 as compared to $ 2.28 billion in the same period last year mainly due to the declined outsourcing business of India on the back of the various restrictions put by developed economies. Indian services sector, which includes banking, insurance, outsourcing, R&D, courier and technology testing, represent around 60% share in the country’s GDP. During the 2012-13, foreign investment in the segment fell by 7 percent to $ 4.83 billion from $5.21 billion in 2011-12.
In spite of the government various efforts to increase FDI, during April-August, 2013 has declined, reflecting the need to take more steps to improve the business environment in the country. Overall, FDI during the April-August period of 2013-14 has grown by a marginal 4 percent to $8.46 billion, from $8.16 billion in the first five months of 2012-13.
FDI is considered crucial for economic development of a country and to attract maximum FDI into the country, the government has been relaxing the foreign investment norms in various sectors. Recently, the government has also started exercise in allowing FDI in railways sector besides liberalising FDI norms for construction and housing sector. It is also considering raising the FDI cap in the insurance sector to 49 percent from 26 percent. Meanwhile, India needs around $1 trillion in the 12th five year plan (2012-2017), to overhaul its infrastructure sector such as ports, airports and highways to boost growth.
In spite of the government various efforts to increase FDI, during April-August, 2013 has declined, reflecting the need to take more steps to improve the business environment in the country. Overall, FDI during the April-August period of 2013-14 has grown by a marginal 4 percent to $8.46 billion, from $8.16 billion in the first five months of 2012-13.
FDI is considered crucial for economic development of a country and to attract maximum FDI into the country, the government has been relaxing the foreign investment norms in various sectors. Recently, the government has also started exercise in allowing FDI in railways sector besides liberalising FDI norms for construction and housing sector. It is also considering raising the FDI cap in the insurance sector to 49 percent from 26 percent. Meanwhile, India needs around $1 trillion in the 12th five year plan (2012-2017), to overhaul its infrastructure sector such as ports, airports and highways to boost growth.
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