Skip to main content

FDI in services sector slumps 23% in 2017-18

By
FDI inflows in the servicesNSE -0.38 % sector declined by about 23 per cent to USD 6.7 billion in 2017-18, according to the Department of Industrial Policy and Promotion (DIPP). The sector had attracted FDI worth $8.68 billion in 2016-17. The services sector includes finance NSE 0.63 %, banking, insurance, outsourcing, R&D, courier, tech testing and analysis. As far as overall FDI inflows are concerned, the growth rate recorded a five-year low of 3 per cent at USD 44.85 billion in 2017-18. According to Anis Chakravarty, Lead Economist and Partner, Deloitte India, the slowdown in FDI could be because of re-routing of investments to economies like the US which witnessed an increase in interest rates together with a stronger dollar. 
"Expectations of further rate hikes by Fed, along with the tariff issues, this year can be expected to result in a further slowdown in foreign inflows. "The declining growth rate of FDI is more of an exogenous effect and the policy makerswill have to continue to focus on macro-economic management," Chakravarty said. FDI in chemicals sector too registered a marginal decline in growth rate in 2017-18, when it attracted USD 1.30 billion investments as compared to USD 1.39 billion in 2016-17. Services sector contributes over 60 per cent to India's GDP.
Foreign Direct Investments (FDIs) are important for India as it would require huge investments in the coming years to overhaul the infrastructure NSE 1.12 % sector to boost growth. Decline in foreign inflows could put pressure on the country's balance of payments and may also impact the value of the rupee.
The Economic Times, 16th July 2018, New Delhi

Comments

Post a Comment

Popular posts from this blog

Budget: Startup sector gets new Fund of Funds, FM to allocate Rs 10K cr

By
  The Indian startup sector received a boost with Finance Minister Nirmala Sitharaman announcing the establishment of a new fund of funds (FoF) in the Budget 2025. The minister unveiled a fresh FoF with an expanded scope, allocating Rs 10,000 crore. The initial fund of funds announced by the government with an investment of Rs 10,000 crore successfully catalysed commitments worth Rs 91,000 crore, the minister said.   “The renewal of the Rs 10,000 crore commitment to the Fund of Funds for alternative investment funds (AIFs) is a significant step forward for the Indian startup and investment ecosystem. The initial Rs 10,000 crore commitment catalysed Rs 91,000 crore in investments, and I fully expect this fresh infusion to attract an additional Rs 1 lakh to Rs 1.5 lakh crore in capital,” said Anirudh Damani, managing partner, Artha Venture Funds.   Damani further added that this initiative will provide much-needed growth capital to early-stage startups, further strengthenin...
Post a Comment
Read more

GST collection for November rises by 8.5% to Rs.1.82 trillion

By
  New Delhi: Driven by festive demand, the Goods and Services Tax (GST) collections for the Union and state governments climbed to Rs.1.82 trillion in November, marking an 8.5% year-on-year growth, according to official data released on Sunday. Sequentially, however, the latest collection figures are lower than the Rs.1.87 trillion reported in October, which was the second highest reported so far since the new indirect tax regime was introduced in 2017. The highest-ever GST collection of Rs.2.1 trillion was reported in April. The consumption tax figures highlight the positive impact of the recent festive season on goods purchases, providing a much-needed boost the industry had been anticipating. The uptick in GST collections driven by festive demand had been anticipated by policymakers, who remain optimistic about sustained growth in rural consumption and an improvement in urban demand. The Ministry of Finance, in its latest monthly economic review released last week, stated that I...
Post a Comment
Read more