FDI grows 23% to $12.75 bn during Apr-June, services sector top recipient

Foreign direct investment in India grew by 23 per cent to $12.75 billion during the April-June quarter of 2018-19, according to official data.    

The foreign fund inflows in April-June 2017-18 stood at $10.4 billion, the Department of Industrial Policy and Promotion data showed. 

Key sectors that received maximum foreign investment during the first quarter of the fiscal include services ($2.43 billion), trading ($1.62 billion), telecommunications ($1.59 billion), computer software and hardware ($1.4 billion), and power ($969 million).   

Singapore was the largest source of FDI during April-June 2018-19 with $6.52 billion, followed by Mauritius ($1.5 billion), Japan ($874 million), the Netherlands ($836 million), the UK ($648 million), and the US ($348 million).

A growth in foreign investment assumes significance against the backdrop of widening current account deficit and trade deficit. 

The country's current account deficit (CAD) is likely to touch 2.8 per cent of GDP in 2018-19 on surge in crude oil prices, a report by SBI Research projected.

FPI and FDI inflows are expected to finance a major part of the CAD, the report noted.

FDI had increased at a five-year low growth of 3 per cent at $44.85 billion in 2017-18. An UNCTAD report, too, had stated that the foreign direct investment in India decreased to $40 billion in 2017 from $44 billion in 2016 fiscal.

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

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel