Millennium Post

Despite sops for foreigners, FDI dips 19% in February

India received foreign direct investment (FDI) worth $1.79 billion in February, 2013 — a decline of about 19 per cent due to global economic slowdown.

In February 2012, the country had received FDI worth $2.21 billion. In January this year, the country had attracted $2.15 billion FDI.

During the April-February period of 2012-13, FDI has declined 38 per cent to $ 20.89 billion, an official in the Department of Industrial Policy and Promotion (DIPP) said.

During the same period of the previous fiscal, FDI inflows stood at $33.49 billion.

Sectors which received large FDI inflows during the 11 months of the last fiscal include services ($ 4.74 billion), hotel and tourism ($3.21 billion), metallurgical ($1.39 billion), construction ($1.26 billion) and Pharmaceuticals ($1.11 billion), the official added.

India received maximum FDI from Mauritius ($8.97 billion), followed by Japan ($2.11 billion), Singapore ($ 1.98 billion), the Netherlands ($1.67 billion) and the UK ($1.06 billion).

According to industry experts there is a need to improve business environment in the country.

"There is a need to further improve the business environment. Reforms in the last one year are welcome, but more needs to be done in order to build foreign investors confidence," Head of Tax and expert on FDI with corporate law firm Amarchand & Mangaldas Krishan Malhotra said.

In November 2012, India attracted FDI worth $ 1.05 billion, which was a two-year low. The inflows had aggregated to $36.50 billion in 2011- 12, as against $19.42 billion in 2010-11 and $25.83 billion in 2009-10.

India would require around $1 trillion in the next five years to overhaul its infrastructure sector such as ports, airports and highways to boost growth.

Decline in foreign investments could put pressure on the country's balance of payments and may also impact the value of the rupee.


India's exports to Pakistan improved to $1.64 billion in April-February 2012-13, Parliament was informed on Monday. For the entire 2011-12 fiscal, the shipments to that country had stood at $1.53 billion. Imports from Pakistan rose to $487.5 million in April-February 2012-13. In 2011-12, imports stood at $421.8 million, Commerce and Industry Minister Anand Sharma said in a written reply to the Lok Sabha.

The total bilateral trade during the 11-month period of the last fiscal aggregated $2.12 billion. It had stood at $1.95 billion in 2011-12, he said. But in 2010-11, the two-way trade was $2.37 billion. Both the countries are in the process of further strengthening their trade ties as Pakistan has already switched over from a positive list to an approach of selective negative list of imports.

Sharma said there have been reports of large consignments of sub-standard arecanut meant for tanning industry being imported through Kerala and Kolkata ports and being used by gutka units. 'Reports have been received about the import of arecanut as a vegetable tanning agent under duty exemption schemes. After examining the matter, a public notice... has been issued restricting import of duty free arecanut to the actual users,' he said.
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