FDI down 33% in December to $1.35 billion

Foreign direct investment in India declined about 33% to USD 1.35 billion (Rs 7,124 crore) in December 2011, over the same month in the previous year, an official said.

FDI inflows in December 2010 totalled USD 2.01 billion (Rs 9,094 crore).

However, cumulative the flows during April-December moved up 51% to USD 24.18 billion, from USD 16.03 billion in the same period last year, mainly due to higher FDI inflows during the April-June quarter.

The cumulative figure has crossed USD 19.43 billion which came in the full fiscal of 2010-11, according to the official.

In April, May and June, the country received FDI worth USD 3.12 billion, USD 4.66 billion and USD 5.65 billion, respectively.

Analysts say that FDI in the current financial year will cross USD 30 billion, which will have a positive impact on rupee in the foreign exchange market.

The rupee had fallen 15% last year due to the FII selling pressure in the stock market and rising trade deficit. The trend has reversed since the start of this year.

"Despite decline in December 2011, FDI will cross USD 30 billion but government should take steps to boost investors confidence," an economist said.

The sectors that have received large foreign inflows during the 9-month period this fiscal are: services sector (USD 4.57 billion), pharmaceuticals (USD 3.19 billion), telecom (USD 1.98 billion), construction (USD 1.60 billion), power (USD 1.44 billion) and metallurgical industries (USD 1.49 billion).

During the period, India received highest FDI from Mauritius (USD 8.24 billion), Singapore (USD 3.99 billion), Japan (USD 2.68 billion), UK (USD 2.57 billion), Germany (USD 1.39 billion), Netherlands (USD 1.07 billion) and Cyprus (USD 1.02 billion), the official added.