FDI growth up 23% in Apr-June quarter this fiscal

FDI growth up 23% in Apr-June quarter this fiscal

New Delhi: Foreign direct investment in India grew by 23 percent to USD 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 USD 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 (USD 2.43 billion), trading (USD 1.62 billion), telecommunications (USD 1.59 billion), computer software and hardware (USD 1.4 billion), and power (USD 969 million).

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

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

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The country’s current account deficit (CAD) is likely to touch 2.8 percent of GDP in 2018-19 on the 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 percent at USD 44.85 billion in 2017-18. A UNCTAD report, too, had stated that the foreign direct investment in India decreased to USD 40 billion in 2017 from USD 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.