NEW DELHI :Foreign direct investment (FDI) in India grew 18 per cent during 2016 to touch $46 billion against $39.32 billion in 2015, data from the Department of Industrial Policy and Promotion (DIPP) showed.
FDI is considered a critical driver of economic growth and a major source of non-debt financial resource for the economic development of India. The government has taken many initiatives in recent years such as relaxing FDI norms across sectors like defence, PSU oil refineries, telecom, power exchanges and stock markets.
The main sectors that attracted the highest foreign inflows include services, telecom, trading, computer hardware and software and automobile. Bulk of the FDI came in from Singapore, Mauritius, the Netherlands and Japan.
Data for the April-September 2016 period indicates that the services sector attracted the highest FDI equity inflow of $5.29 billion, followed by telecommunications at $2.79 billion, and trading at $1.48 billion. Total FDI equity inflows for the month of September 2016 touched $5.15 billion.
During the April-September 2016 period, India received the highest quantum of FDI equity inflows from Mauritius ($5.85 billion), followed by Singapore ($4.68 billion), Japan ($2.79 billion), ($1.62 billion), and the US ($1.44 billion).
According to DIPP, the impact investments in India is expected to grow at a compounded annual growth rate of 20-24 per cent to touch $ 6-8 billion by 2025, up from $1 billion in 2015.
The finance minister had announced in the Budget 2017-18 that the Foreign Investment Promotion Board (FIPB) would be phased out.
India needs around $1 trillion for overhauling its infrastructure sector such as ports, airports and highways to boost growth.