FDI up by 92% in January to $2 bn

India received $2 billion foreign direct investment (FDI) in January, showing an annual growth of 92% and taking cumulative inflows to $26.19 billion for April-January period of the current fiscal.

In January 2011, the country received FDI worth $1.04 billion.

Experts feel if reforms are pushed, there is much more potential for attracting increased foreign investment.

"There is an urgent need for strong reforms like 100% FDI in sectors such as multi-brand retail and insurance. There is a need to boost investor confidence. $2 billion in month is not a big number," Ficci Secretary General Rajiv Kumar said.

The sectors which received large foreign FDI inflows during the 10-month period this fiscal are: services ($4.83 billion), pharmaceuticals ($3.20 billion), telecommunication ($1.99 billion), construction ($2.23 billion), power ($1.56 billion) and metallurgical industries ($1.65 billion).

Mauritius remain the top source of inflows ($8.91 billion), thanks to the double taxation avoidance treaty.

Other sources were Singapore ($4.30 billion), Japan ($2.75 billion), UK ($2.75 billion), Germany ($1.46 billion), Netherlands ($1.16 billion) and Cyprus ($1.31 billion).

FDI inflows into India totalled $19.42 billion in 2010-11 financial year, down from $25.83 billion in 2009-10.

Recently, the government has liberalised the FDI regime and allowed overseas investment in bee-keeping and share-pledging for raising external debt.

Besides, the conditions for FDI in construction of old-age homes and educational institutions have been eased.

These will not be subject to the minimum and built-up area, capitalisation and lock-in period norms as applicable for the construction activities.