FDI in services sector grew 77.6% during Apr-Dec 2016-17

The Dollar Business Bureau

Foreign direct investments (FDI) in India in the services sector has surged by 77.6% to $7.55 billion in the initial nine months of this fiscal, supported by government measures for improving the ease of doing business.

The services sector, including banking & insurance, courier, outsourcing, R&D, and technology testing, had got FDI worth $4.25 billion during the period April-December of the previous fiscal of 2015-16, as per the Department of Industrial Policy and Promotion (DIPP).

The services sector contributes more than 60% to the country’s GDP and makes up for 17% of the overall inflows of foreign investments.

Besides, the other sectors that have recorded growth in investment inflows during the given period of the current fiscal are telecom, trading, computer software and hardware and automobile, with inflows of $5.54 billion, $2 billion, $1.81 billion and $1.45 billion, respectively.

Apart from FDI growth in key sectors such as services, total foreign inflows in India increased 22% to $35.84 billion during the period April-December 2016-17.

Ministry of Commerce and Industry is also considering providing relaxation in FDI norms in some specific sectors such as retail in order to further boost the inflows.

FDI is considered important for India, which requires around $1 trillion for revamping its infrastructure sector like airports, ports, and highways to improve growth.

A robust foreign investment inflow will help in improving India’s balance of payments situation and strengthening rupee against other international currencies, particularly the US dollar.