Foreign direct investment in the country’s services sector dipped 7.5 per cent to USD 1.22 billion during the first half of the current financial year.
The services sector, which includes banking, insurance, outsourcing, R&D, courier and technology testing, had received FDI worth USD 1.32 billion during April-September 2013-14, the data by Department of Industrial Policy and Promotion shows.
The services sector contributes over 60 per cent to India’s GDP. In 2013-14, foreign investment in the sector fell to USD 2.2 billion from USD 4.83 billion in 2012-13.
The government is taking several measures to boost foreign inflows, according to an official.
The bill to hike FDI cap in insurance sector to 49 per cent from the current level of 26 per cent is pending in the Rajya Sabha.
The other sectors that have recorded decline in foreign investment during the first two quarters of this financial year include construction and metallurgical industries.
During April-September of this fiscal, foreign investments showed a growth of 15 per cent to USD 14.47 billion as compared to USD 12.59 in the same period last year.
During the period, India received maximum FDI from Mauritius at USD 4.19 billion, followed by Singapore (USD 2.41 billion), the Netherlands (USD 1.97 billion), the US (USD 1.19 billion), Japan (USD 937 million) and UK (USD 842 million).
Foreign investments are considered crucial for India, which needs around USD 1 trillion over five years (2012-17) to overhaul its infrastructure sector such as ports, airports and highways to boost growth. PTI RR DP MKJ MR 12211119