FDI Inflows In Service Sector Dips 61% In April-Dec

(RTTNews) - Foreign direct investment into the services sector, which includes banking, insurance, outsourcing, R&D, courier and technology testing, in the first nine month of this fiscal fell by 61 percent to $1.59 billion from $4.05 billion in the corresponding period a year ago, Department of Industrial Policy and Promotion (DIPP) say.

The services sector contributes over 60 percent to India's GDP.

With the drop in FDI in services, overall foreign inflows in the country during the nine-month period declined by three percent to $22.04 billion from $22.79 billion reported in April-December 2012 period.

Other sectors where inflows have declined include Construction Development, Metallurgical Industries and Hotel and Tourism.

Foreign investment is considered crucial for India, which needs around $1 trillion in the five years ending March 2017 to develop infrastructure such as ports, airports and highways and boost growth.

A decline in foreign investment could affect the country's balance of payments and the rupee.