FDI in services dips 22% to USD 3.27 bn in Apr-Feb last fiscal

Foreign direct investment (FDI) in the country’s services sector declined by about 22 per cent to USD 3.27 billion (Rs 14,958 crore) during April-February last fiscal, according to the industry ministry data.The services sector (financial and non-financial services) had attracted FDI worth USD 4.18 billion (Rs 20,015 crore) during April-February, 2009-10.

According to economists, sovereign debt problem in Europe are making players cautious of undertaking overseas investments.Global economic situation is also yet to fully recover and is impacting FDI inflows into the country, an official said.The services sector, despite the 22 per cent dip in FDI, topped the chart in attracting maximum investment.

Telecommunications segment, including radio paging and cellular mobile, was the second best sector attracting investments at USD 1.41 billion, followed by automobile (USD 1.32 billion ), power (USD 1.23 billion , housing and real estate (USD 1.10 billion) and metallurgical industries (USD 1 billion) during the period.

Country-wise, the highest FDI of USD 6.63 came from Mauritius followed by Singapore (USD 1.64 billion), Japan (USD 1.52 billion), Netherlands (USD 1.13 billion) and the US (USD 1.12 billion).

Overall FDI inflows into the country dropped by 25 per cent to USD 18.35 billion during April-February 2010-11, against USD 24.62 billion in the year ago period.

The Planning Commission has recently pitched for further liberalisation of FDI policy. "Tune-up FDI and trade policies to attract quality investment in critical areas," the Commission said in a presentation before Prime Minister Manmohan Singh at the recent meeting of the full Plan panel in New Delhi.