FDI dips to $1.27 billion in August, lowest in 8 months

The decline could put pressure on the country's balance of payments and may also impact the value of the rupee

Foreign direct investment into India declined by about 10% in August this year to $1.27 billion, the lowest figure in the last eight months.

In August 2013, the country had received FDI worth $1.40 billion. Last time in December 2013, FDI into India was $1.10 billion.

However, for the April-August period of this fiscal, 2014-15, the foreign inflows showed a growth of 42% to $12.01 billion as compared to $8.46 billion in the first five months of 2013-14, according to the data of the Department of Industrial Policy and Promotion.

Amongst the top 10 sectors, telecom received the maximum FDI of $2.33 billion in the 5 months, followed by services ($1.08 billion), pharmaceuticals ($903 million) and construction ($446 million).

During the period, India received maximum FDI from Mauritius at $3.93 billion, followed by Singapore ($1.89 billion), Netherlands ($1.56 billion), Japan ($897 million), UK ($827 million) and the US ($394 million).

In 2013-14, FDI inflows in India were $24.29 billion as against $22.42 billion in 2012-13.

Decline in foreign investments could put pressure on the country's balance of payments and may also impact the value of the rupee.

The Indian rupee on Friday snapped a two-day declining trend and bounced back by 39 paise to end at 61.44 against the US dollar.

India requires around $1 trillion in the next five years to overhaul its infrastructure sector, including ports, airports and highways to boost growth.

The government is taking more steps to boost FDI in the country. It has raised the foreign investment limit to 49% in defence manufacturing and relaxed the policy in construction sector. The government has also proposed to increase the FDI cap in insurance to 49%.