India: FDI may cross $30bn this financial year.

Foreign direct investment in India declined about 33 per cent to $1.35 billion (Rs 7,124 crore) in December 2011 compared with the same month in the previous year, an official said. FDI inflows in December 2010 totalled $2.01 billion (Rs 9,094 crore).

Cumulative FDI during April-December period, however, moved up 51 per cent to $24.18 billion from $16.03 billion in the corresponding period of the previous year, mainly due to higher FDI inflows during April-June quarter.

The cumulative figure has crossed $19.43 billion, recorded during financial year 2010-11, according to the official.

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

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

The rupee had fallen 15 per cent last year due to 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 $30 billion...but the government should take steps to boost investors confidence," an economist said.

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

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

Source : island.lk