New Delhi: Foreign investments in the services sector increased 77.6% to $7.55 billion in the first nine months of the current fiscal, helped by government steps to improve ease of doing business.
The sector, which includes banking, insurance, research and development (R&D), outsourcing, courier and technology testing, had received foreign direct investment (FDI) worth $4.25 billion during the April-December period of last fiscal, 2015-16, according to the Department of Industrial Policy and Promotion (DIPP).
The sector contributes over 60% to India’s gross domestic product (GDP) and accounts for 17% of the total foreign investment inflows.
The other sectors where inflows have recorded growth during the nine-month period of 2016-17 are telecom ($5.54 billion), trading ($2 billion), computer software and hardware ($1.81 billion) and automobile ($1.45 billion).
In step FDI growth in important sectors like services, overall foreign inflows in the country increased 22% to $35.84 billion during April-December 2016-17.
The commerce and industry ministry is also considering relaxing FDI norms in certain sectors including retail to further boost inflows. Foreign investment is considered crucial for India, which needs around $1 trillion for overhauling its infrastructure sector such as ports, airports and highways to boost growth.
A strong inflow of foreign investments will help improve the country’s balance of payments situation and strengthen the rupee against other global currencies, especially the US dollar.