FDI inflows jump 65% to $1.94 bn

India's foreign direct investment inflows grew by over 65 per cent year-on-year to $1.94 billion in October, according to the Department of Industrial Policy and Promotion.

In October 2011, the country had attracted FDI worth $1.16 billion.

For the April-October period of this fiscal, however, FDI inflows have declined by about 27 per cent to $14.78 billion, from $20.29 billion in the year-ago period as overseas investment inflows were small in the initial months.

Sectors which received large FDI inflows in September include services ($3.6 billion), hotel and tourism ($3.11 billion), metallurgical ($1.21 billion), construction ($691 million) and automobile ($743 million).

For the first seven months of the fiscal, India received maximum FDI from Mauritius ($6.75 billion), Japan ($1.52 billion), Singapore ($1.24 billion) the Netherlands ($1.05 billion) and the UK ($611 million),

the DIPP said.

The October figure is lower than the previous month when the country received highest FDI for a month in this fiscal.

FDI inflows had more than doubled to $4.67 billion in September.

The inflows had aggregated to $36.50 billion in 2011-12 against $19.42 billion in 2010-11 and $25.83 billion in 2009-10.

Foreign investments are important for India, which needs around $1 trillion in the next five years to overhaul its infrastructure sector such as ports, airports and highways to boost growth.

Decline in foreign investments will put pressure on the country's balance of payments and could also impact the rupee.