FDI inflows slumped to 2-year low in Nov 2012

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SummaryIndia's foreign direct investment inflows declined to a nearly two-year low of $1.05 billion in November 2012, mainly due to global economic uncertainties.

India's foreign direct investment (FDI) inflows declined to a nearly two-year low of $1.05 billion in November 2012, mainly due to global economic uncertainties.

In November 2011, the country had attracted FDI worth $2.53 billion.

For the April-November period 2012-13, the inflows have declined by about 31%to $15.84 billion, from $22.83 billion in the year-ago period, a senior official in the the Department of Industrial Policy and Promotion (DIPP) said.

According to experts, problems in the global economic situation is the main reason for decline in the inflows.

“The global economic slowdown and lack of political consensus on FDI-related matters are the reasons for decline,” said Krishan Malhotra, head, Tax and an expert on FDI with corporate law firm Amarchand & Mangaldas.

Sectors that received large FDI inflows during the eight months of the current fiscal include services ($3.63 billion), hotel and tourism ($3.13 billion), metallurgical ($1.26 billion), construction ($1.01 billion) and automobile ($760 million), the official added.

India received maximum FDI from Mauritius ($7.2 billion), Japan ($1.56 billion), Singapore ($1.5 billion) the Netherlands ($1.09 billion) and the UK ($615 million).

The previous low was recorded in January 2011 when FDI inflows slipped to $1.04 billion.

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