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FDI in India slumps 19 pct in December

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(Globalpost/GlobalPost)

Foreign direct investment (FDI) in India slid by 19 percent to $1.1 billion in December 2012, marking a blow to government efforts to draw vital funds to overhaul the country's shabby infrastructure.

India has said it needs to attract around $1 trillion in investment over the the next five years to overhaul its dilapidated infrastructure from ports to airports and highways in order to boost flagging economic growth.

In December 2011, the country drew $1.35 billion in foreign direct investment.

In the eight months from April to December foreign investor inflows fell by some 42 percent compared to a year earlier to $16.94 billion, according to data on the web site of the Department of Industrial Policy and Promotion.

Overseas investors have increasingly been giving a wide berth to the country of 1.2 billion people, until recently seen as a rewarding destination for foreign money.

Investors have been deterred by a string of graft scandals, suffocating red tape, high inflation, sharply slowing growth and fierce opposition to government moves to further open up the economy and make it easier to do business in India.

Longer term, the government says it still believes foreign direct investment in India will pick up as investors seek new sources of income growth.

Finance Minister P. Chidambaram has sought to boost foreign investment since taking charge of the ministry last August, telling officials to fast-track foreign direct investment approvals.

The government has said it is hoping that its recent steps to liberalise India's economy and invite more investment in the retail, aviation, insurance and other sectors could increase foreign inflows.

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http://www.globalpost.com/dispatch/news/afp/130220/fdi-india-slumps-19-pct-december