India's FDI during Jan-Nov 2010 dips by 26% to $19 bn

India's foreign direct investment (FDI) during January-November 2010 declined by 26 per cent to $18.99 billion (Rs 86,921 crore) on account of fragile global economic recovery.

During the first 11 months of 2010, the country received FDI worth $25.5 billion (Rs 123,795 crore), according to the latest Industry Ministry data.

According to industry experts the weak global economic recovery coupled with sovereign debt crisis in Europe is impacting FDI inflows into the country.

"The global economic recovery is not strong and it is affecting FDI," an economist said.

Planning Commission Deputy Chairman Montek Singh Ahluwalia recently said in Davos that "there is some weakening in the last few months in the FDI...Due to the financial crisis in 2008 and 2009, many investors' decisions were postponed".

The Reserve Bank of India (RBI) has said that environment-sensitive policies are also hurting FDI in mining, township and ports sector.

"A major reason for the decline in inward FDI is reported to have been the environment-sensitive policies pursued, as manifested in the recent episodes in the mining sector, integrated township projects and construction of ports, which appear to have affected the investors sentiments," RBI had said in its Macroeconomic and Monetary Policy Development report.

In its third quarter monetary policy review, the RBI has said that efforts should be made to attract more FDI in the country, as they are more stable than portfolio investments.

During January-November 2010, foreign institutional investors (FIIS) pumped in about $39 billion into the Indian economy.

Major sectors, which attracted FDI include services, telecommunication, power, constriction activities, computer software and hardware and automobile industry.

The country received highest FDI from Mauritius followed by Singapore, the US, UK, Netherlands, Japan and Cyprus.