According to Department of Industrial Policy & Promotion (DIPP), foreign direct investment (FDI) in India increased to US $61.96 billion in 2017-18. FDI inflow in previous fiscal was US $60 billion. In last four years perod, FDI inflows has jumped to US 4222.75 billion from US $152 billion.
The main sectors that received maximum FDI were services, computer software and hardware, telecommunications, construction, trading and automobile. Major sources of FDI to Indian included Mauritius, Singapore, Japan, Netherlands, US, Germany, France and UAE.
However, according to recent UNCTAD (United Nations Conference on Trade and Development) report, FDI to India decreased to US $40 billion in 2017 from US $44 billion in 2016, while outflows from India, the main source of investment in South Asia, has doubled.
Foreign investments including FDI are considered crucial for India as it needs around $1 trillion for overhauling its infrastructure sector such as ports, airports and highways to boost growth. Strong inflow of foreign investments mainly helps to improve the country’s balance of payments (BoP) situation and also strengthen the rupee value against other global currencies, especially dominant US dollar. To attract inflow of foreign investments, the central government has announced several measures including liberalisation of FDI policy and improvement in business climate.