FDI slips to 8-month low of $1.4 billion in August

FDI slips to 8-month low of $1.4 billion in August Despite the government’s painstaking efforts to boost foreign direct investment (FDI) into India, foreign investments slipped to their lowest level in 8 months in August this year.

According to fresh stats released by the Department of Industrial Policy & Promotion (DIPP), FDI into India slipped 38 per cent year-on-year to $1.4 billion in August this year. In the corresponding month of last year, India had attracted foreign investments worth around $2.26 billion.

During the April to August period of current financial year, FDI grew by just 4 per cent to settle at $8.46 billion, from $8.16 billion in the corresponding first-month period of last financial year.

The poor growth in FDI prompted experts to suggest that the government should take steps to improve business environment to attract foreign investments.

Krishan Malhotra, an expert in FDI with corporate law firm Amarchand & Mangaldas, said, "There is a need to further improve the business environment. Reforms in the recent past are welcome, but more needs to be done in order to build foreign investors confidence.”

The slight increase in FDI during the April to August period of this year was because of sectors like services ($1.19 billion), pharmaceutical ($1.07 billion) and automobile ($661 million). Singapore made the biggest foreign investment ($2.37 billion), Mauritius, the Netherlands and Germany followed at $2.13 billion, $980 million and $529 million, respectively.