FDI Inflows Fall 38% to $2.91 bn in Sept - The New Indian Express

FDI Inflows Fall 38% to $2.91 bn in Sept

Published: 04th December 2013 11:02 AM

Last Updated: 04th December 2013 11:02 AM

In what is being seen as a reflection of the investment climate in the country, foreign direct investment (FDI) fell by 38 per cent to $2.91 billion in September.

According to data available with the Department of Industrial Policy and Promotion (DIPP), in September last year, the FDI number stood at $4.67 billion. And for the April to September period this year, FDI inflows have fallen 11 per cent to $11.37 billion from $12.84 billion in the corresponding period of the last fiscal.

“The investment climate has not been conducive in the country for a long time. What we need is an environment where policy making is devoid of flip flops. All eyes are now on the next government to see what line they take as far as policy formulation is concerned,” said Motilal Oswal’s senior vice president and head equities Manish Sonthalia.

Another head of research of a Mumbai-based brokerage points out that not much of investments have fructified after the opening of the retail sector. “Has the money come in?” he asks referring to FDI in retail.

According to the DIPP data, the decline in FDI has been seen in sectors like services, telecom and the metallurgical industries where during the April to September period, FDI declined to $1.32 billion, $32 million and $240 million, respectively.

Compare that to the first half of the last fiscal and these number stood at $3.04 billion for services, 43 million for telecom and $685 million for metallurgical industries.

But, not everyone is perturbed. The 38 per cent decline in the month of September itself is being seen as an aberration by some economists. “So far, FDI inflows have not been too bad this year. In some months, investments just don’t happen. The important thing to note is that a 38 per cent decline in the September numbers does not necessarily point to the slowing down of the FDI cycle,” said HDFC Bank’s chief economist Abheek Barua.

The DIPP data shows that FDI inflows in 2012-13 totalled $22.42 billion, a decline from $36.5 billion in 2011-12.

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