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FDI in services sector dips 15% during Apr-May 2015


Sunday, 9 August,New Delhi: Foreign direct investment (FDI) in the services sector dipped 15% to US $488 million during April-May 2015.

The services sector, which includes banking, insurance, outsourcing, R&D, courier and technology testing, had received FDI worth US $574 million during April-May 2014, the data by Department of Industrial Policy and Promotion (DIPP) showed.

The (services) sector contributes over 60% to the India’s Gross Domestoc Product (GDP). In 2013-14, foreign investment in the sector increased to US $3.25 billion from US $2.22 billion in 2012-13.

Foreign investment in the services sector is expected to increase as the government has relaxed FDI norms in sectors such as insurance and has taken steps to improve ease of doing business in the country, an official said.

The recent introduction of composite cap concept would also attract more investors to the sector, the official added.

Other sectors that recorded decline in foreign investment during the first two months of this fiscal include construction development, telecommunication and pharmaceuticals.

Total FDI in April-May, however, soared 40% year-on-year to US $7.45 billion on the back of higher investment in trading, automobile and power sectors.

Foreign investments are considered crucial for India, which needs around US $1 trillion over five years to overhaul its infrastructure sector such as ports, airports and highways to boost growth.


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