Services sector most favourite among foreign investors

India attracted $2.14 billion foreign direct investment (FDI) in the services in the first four months of the current fiscal, the highest among all sectors.

Despite the economic downturn, the country managed to attract $3.47 billion FDI in July, while it was $2.24 billion in the year ago month, according to official data.

India's total FDI inflow during April-July 2009 was $10.49 billion, down 15 per cent from $12.32 billion in the same period previous year, the data said.

According to an UNCTAD report, the FDI in India may erode sharply from the record $42 billion in 2008 with trans-national corporations (TNCs) going slow on expansion plans following the global financial meltdown.

The services sector, including financial and non-financial segment, attracted 20 per cent of the total FDI inflows in the April-July period.

It was followed by housing and real estate sectors that attracted $1.41 billion investments. The telecommunications sector attracted investments worth $993 million.

The highest FDI of $4.55 billion came from Mauritius followed by the US and Singapore in April-July 2009.

The government recently approved formation of an investment promotion firm 'Invest India', where it will partner the states and industry, to help attract foreign investors and provide them a hassle-free entry.