FDI inflows into India stood at $19.4 bn during Jan-June

The highest FDI received in January was $4.48 billion, compared to $2.18 billion in the same month a year ago

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Foreign investment inflows during January-June 2015 stood at $19.4 billion, compared to $14.94 billion in the year-ago period. This, however, is at variance with the foreign investment inflows of $31 billion as claimed in a report published in Financial Times.

According to the Department of Industrial Promotion & Policy (DIPP), during the six-month period, foreign investment inflows showed a fluctuating trend. The highest foreign direct investment (FDI) received in January was $4.48 billion, compared to $2.18 billion in the same month a year ago. FDI inflows also grew in February to $3.28 billion compared to $2.01 billion. However, the month of March saw a dip and reached $2.11 billion against $3.53 billion in the same month a year ago.

Despite a series of foreign trips undertaken by Prime Minister Narendra Modi to most developed countries of the world, investments from these continued to remain sluggish.

During January-June 2015 - the latest period for which data is available - FDI from the US, Germany, Japan and France stood at $0.97 billion, 0.27 billion, $1.12 billion and $0.2, respectively, according to DIPP figures.

"The figure of $31 billion (as reported by Financial Times) looks unlikely as there has been no big-ticket investment this year in any of the significant sectors of manufacturing. Even in the sectors where the government has relaxed FDI norms such as defence, railways and insurance, nothing much happened. Manufacturing is yet to receive any substantial boost," said Madan Sabnavis, chief economist, CARE Ratings.

According to Sabnavis, India continues to remain an attractive destination for foreign inflows due to the sheer size of its market and the vast scope of investment into the infrastructure sector, which in other developing countries such as Hong Kong, Brazil and South Africa have saturated.

Among the top 10 investing countries, the biggest investor continues to be Mauritius that put in money to the tune of $5.23 billion during January-June 2015 compared to $3.79 billion in the corresponding period of 2014.

Sectors that saw the highest foreign capital inflows during January-June 2015 were telecommunications, auto and services.

FDI into these sectors stand at $3.67 billion (telecommunications), $2.08 billion (automobile industry) and $1.6 billion in services, which includes banking, insurance, outsourcing and logistics, among others.

According to Biswajit Dhar, professor of economics in Jawaharlal Nehru University, there is a difference between 'feelgood' factor and actual investments taking place. "The FDI inflows received in the calendar year were no doubt more than last year's, but these numbers do not contribute to economic growth or generation of jobs. Besides, there has been no change in the source of FDI. These inflows are not contributing to the growth dynamics." Interestingly, FDI inflows have reduced in some of the sectors during the January-June period compared to the same period last year.