FDI declines 6% to $1.53 billion in November 2014

Foreign direct investment (FDI) in India declined by 6% to $1.53 billion in the month of November 2014 as compared to $1.63 billion in the same month of previous year. However, FDI during the April-November FY15 increased by 22% y-o-y to $18.88 billion from $15.45 billion recorded in the corresponding period of the previous fiscal. The sectors that received highest inflows during the first eight months of current fiscal include telecommunications ($2.47 billion), services ($1.84 billion) automobile ($1.53 billion), pharmaceuticals ($1.15 billion) and computer software and hardware ($862 million). Country wise, maximum FDI during the reported period was received form Mauritius with $5.20 billion followed by Singapore ($3.74 billion), Netherlands ($2.42 billion), the US ($1.35 billion) and Japan ($1.28 billion). During FY14, FDI increased by 8% to $24.29 from $22.42 billion recorded in the FY13. FDI is considered crucial for India, which requires 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. However, to attract maximum FDI into the country, the government has been liberalizing the foreign investment policy. Recently, the government has eased the FDI norms in insurance sector. The government is of the view that hiking of the foreign investment cap in the insurance sector to 49 per cent will result in capital inflow of $6-8 billion. In order to encourage manufacturing of equipments, including diagnostic kits and other devices, the government also allowed 100 percent FDI under automatic route in medical devices sector. Besides, the government’s 'Make in India' programme, launched by Prime Minister Narendra Modi is another big-ticket reform that the government expects the foreign investors to bring FDI worth billions of dollars into the country.