New Delhi: Reflecting slowdown in the economy and erosion of investor confidence, foreign direct investment (FDI) in India has declined by 41 percent to USD 1.85 billion in April.
The country had attracted FDI worth USD 3.12 billion in April, 2011.
Attributing the decline to global and domestic economic problems, the experts have suggested that the government should push some big-ticket reform initiatives to restore confidence of global investors.
"The government should take important and key reforms immediately like allowing FDI in multi-brand retail and permitting foreign airlines to buy stake in domestic carriers. These moves would help in increasing FDI inflows in the country," Ficci Secretary General Rajiv Kumar said.
The decline in FDI comes at a time when India's economic growth slipped to 9-year low of 6.5 per cent in 2011-12. The growth in the January-March quarter was merely 5.3 percent.
More recently, Standard and Poor's and Fitch have lowered India's credit outlook to negative from stable citing reasons such as high inflation and inadequate reforms.
However, in March, the country had received the highest ever monthly inflows of USD 8.1 billion. Earlier, highest FDI of USD 5.65 billion was received in June last year.
Cumulative FDI inflows for the fiscal 2011-12 amounted to USD 36.50 billion.
The sectors which received large FDI inflows in April include services (USD 449 million), pharmaceuticals (USD 359 million), construction (USD 120 million) and power (USD 68 million), a senior official in the Department of Industrial Policy and Promotion (DIPP) said.
In April 2012, India received highest FDI from Mauritius (USD 633 million), UK (USD 366 million), Netherlands (USD 357 million), Singapore (USD 146 million) and Cyprus (USD 69 million), the official added.
The inflows had aggregated to USD 19.42 billion in 2010-11, down from USD 25.83 billion in 2009-10.
First Published: Tuesday, June 19, 2012, 16:38