FDI in India nearly halves in January

Foreign direct investment in India nearly halved in January from a year earlier, data showed yesterday, despite the country’s strong economic growth.

Foreign direct investment slumped 48 per cent to $1.04 billion in January from $2.04 billion in the same month last year, official data revealed.

FDI in India has been dropping amid concerns over corruption, bureaucratic delays, rising inflation and perceived government resistance to opening up the economy.

“These are worrisome figures. The government will have to look at long-pending (economic) reforms to boost foreign investment,” said Rupa Rege Nitsure, chief economist with the state-run Bank of Baroda.

In the 10 months to January of the current fiscal year to March 31, FDI fell 25 per cent, compared with the same period a year earlier, to $17 billion.

In 2009-10, the country’s FDI had declined to $25.88 billion from $27.33 billion in the previous financial year.

Foreign investment is vital for India, which needs to fund a $1 trillion scheme over the next five years to overhaul its dilapidated ports, airports, highways and other infrastructure seen as key to boosting economic growth.