In March, foreign direct investment (FDI) in India saw a decline for the third consecutive month, dropping by 11 percent year-on-year to 1.07 billion Dollars, a situation exacerbated by the financial turmoil in Europe. This marks a decrease from 1.2 billion Dollars recorded during the same period last year. Over the course of the financial year 2010–11, total inflows dropped by 25% to 19.43 billion Dollars, indicating a pressing need for the country to refine its investment policies to attract foreign capital, according to industry sources.
The FDI figures for 2009–10 stood at a higher total of 25.83 billion Dollars, still reflecting a decrease from the 27.33 billion Dollars that was invested in the previous financial year. "The numbers are not enough; the government has to take more steps," sources emphasized. The Department of Industrial Policy and Promotion, which serves as the primary agency for FDI policy, has begun implementing measures, including the consolidation of related rules and regulations into a single comprehensive document.
The downward trend in FDI was evident in January and February of this year as well, where figures plunged by 48 percent to 1.2 billion Dollars and 30 percent to 1.04 billion Dollars, respectively, when compared to the previous year's data. The sectors currently drawing in FDI encompass services, telecommunications, housing and real estate, construction activities, and power.
Among the major investors in India are the United States, United Kingdom, Singapore, Netherlands, Japan, Germany, and the United Arab Emirates. Since January 1 to May 5, 2011, foreign institutional investors have put in a total of 3.6 billion Dollars.