April FDI grows 19.3% over March

India received $2.34 billion FDI in April, a rise of 19.3% over the previous month of March when total FDI inflow was $ 1.96 billion. This clearly indicates foreign investors are returning to the country, while most part of the world is reeling under recession. However, considering year-on-year, FDI inflow in April dipped by 37% this year as against $ 3.74 billion in the same month last year. As the economy was booming and the money was cheap world over, India received FDI of $27.30 billion in the first six months of the last year as against $24.50 billion in the same period of the previous year. As FDI is linked with the global economy, which is still in turmoil, achieving the same level of FDI like last year would be challenging. With revival of stock markets, the foreign investment inflow is likely to improve. Economists feel that as Indian economy is likely to continue with its high growth of around 7%, foreign companies would continue to invest in India to contain the impact of global slowdown. Particularly if the government increases the cap on FDI in insurance sector and allows that in the retail sector, total FDI inflows can witness a sudden spurt in 2009-10.