Services sector FDI up marginally in April-July

The services sector includes banking, insurance, outsourcing, R&D, courier and technology testing,

Foreign direct investment in the services sector rose marginally to $1.03 billion during the April-July period of the ongoing fiscal, according to the Department of Industrial Policy and Promotion data.

The services sector, which includes banking, insurance, outsourcing, R&D, courier and technology testing, had received FDI worth $1.02 billion during the first four months of the previous fiscal, 2013-14.

The government is taking steps to boost inflows into the sector and has decided to raise FDI limit to 49% in the insurance sector from the current level of 26%, said an official.

The services sector contributes over 60% to India's GDP. In 2013-14, foreign investment in the sector fell to $2.2 billion from $4.83 billion in 2012-13.

The other sectors which received high foreign investment during the first four months of this financial year include telecommunication, construction, computer software and hardware and power.

Foreign investments are considered crucial for India, which needs around $1 trillion over five years (2012-17) to overhaul its infrastructure sector such as ports, airports and highways to boost growth.

The overall FDI during April-July this fiscal has jumped by 52% to $10.73 billion.