Indian telecom sector received heavy inflow of foreign direct investment (FDI) in the first quarter of the current financial year. At Rs 29,352 crore, the FDI in telecommunications in just one quarter of FY20, surpassed the total FDI inflow into the sector in the entire previous financial year FY19, according to the data from Ministry of Commerce and Trade. FDI inflow in India has shot up 33 per cent in the first quarter of the current financial year. Foreign direct investments of Rs 1.13 lakh crore has been received in Q1 FY20, which was Rs 85,180 crore in the same quarter last year.
In the month of June alone, a cumulative FDI of Rs 50,567 crore was received in India. In dollar terms, the growth in FDI in the first quarter remained 28 per cent. On an average, service sector including financial, banking, insurance, outsourcing, R&D, etc, receives the maximum, that is, 18 per cent of the total FDI received in India. In the first quarter, the service sector received Rs 19,462 crore, second highest after telecommunications. In 2018-19, India received a lifetime high FDI of $62 billion, with maximum share of $9.2 billion in the services sector.
The government has been consistently trying to ease the process of investing in India. The efforts of the government are aimed to boost FDI in the country, which would eventually help to steer India out of the ongoing slowdown. Recently, a major decision on single-brand retail has allowed 100 per cent FDIin the sector. In another decision, the government has also permitted 100 per cent FDI through the automatic route in coal and its related industries.
Commerce and Industry Minister Piyush Goyal said a few days back that, to boost domestic manufacturing, 100 per cent FDI in contract manufacturing under automatic route has been allowed. Increasing FDI in this scenario can provide some help to the manufacturing sector, which has pulled down the country’s GDP to a six-year low.