FDI in services sector grew 36.5% to $9.15 billion in 2018-19: DPIITDate: 07 June 2019 Tags: Services
According to the Department for Promotion of Industry and Internal Trade (DPIIT) data, foreign direct investment (FDI) in services sector grew 36.5% to USD 9.15 billion in 2018-19. Services sector includes finance, banking, courier, insurance, outsourcing, R&D, tech testing and analysis. It attracted FDI worth US $6.7 billion in 2017-18.
- FDI in other sectors: Healthy growth in FDI inflows was recorded in fields of computer software and hardware, trading, automobile industry, and chemicals.
- However, overall FDI inflows declined for first time in last six years in 2018-19, falling 1% to US $44.37 billion as foreign investments fell significantly in telecommunication and pharmaceutical sectors.
- FDI in chemicals sector too registered marginal decline in 2017-18 as it attracted US $1.30 billion investments as compared to US $1.39 billion in 2016-17.
- Significance: Increasing FDI inflows in services sector is vital as it contributes over 60% to the gross domestic product. This sector accounts for about 18% of the total FDI India received between April 2000 and March 2019.
- Foreign investments are crucial as India needs around US $1 trillion for overhauling its infrastructure sector such as airports, ports and highways to boost growth.
- Strong inflow of foreign investments will help to improve India's balance of payments (BoP) situation and strengthen value of rupee against global currencies, especially US dollar.
- Government support: Union government has taken several measures like fixing timeliness for approvals and streamlining procedures to improve ease of doing business in the country and attract foreign investments.