Foreign direct investment (FDI) in India registered its second consecutive decline in February 2011, dipping by 30 per cent year-on-year to USD 1.2 billion in the backdrop of financial turmoil in Europe.
In February 2010, India attracted foreign direct investment (FDI) worth USD 1.7 billion.
During the 11-month period from April 2010, to February 2011, FDI inflows into India declined by 25 per cent to USD 18.3 billion, which makes it imperative for the country to fine-tune its policies to attract overseas investment.
The country received FDI worth USD 24.6 billion during the April-February, 2009-10, period.
"The numbers are bad. We will not be able to touch last year's FDI figure," an official told the media, adding, "The government needs to take the matter seriously and initiate steps to boost investors' confidence."
Feeling the impact of the turbulence that battered the global economy in 2009-10, India's FDI dropped to USD 25.88 billion during the fiscal from USD 27.33 billion in the previous financial year.
"This year is not good for FDI. The global economic recovery is very fragile in European economies. India needs some policy actions to boost the FDI," CRISIL Principal Economist D K Joshi said.
On its part, the Department of Industrial Policy and Promotion (DIPP) has initiated steps to streamline the FDI procedures, including consolidation of all rules and regulations into a single document.
In January, FDI plunged by 48 per cent vis-a-vis the corresponding month of the previous year to USD 1.04 billion.
The sectors that attracted FDI include services (financial and non-financial), telecommunications, housing and real estate, construction activities and power.
Countries including Mauritius, Singapore, the US, UK, Netherlands, Japan, Germany and UAE are the major investors in India.
As far as FII inflows are concerned, in February, foreign institutional investors pulled out USD 721.33 million, whereas they invested USD 946.21 million in the same period last year.