Snapping two months of declining trend, foreign direct investment (FDI) in India increased 30.69 per cent to $2 billion (about Rs 9,000 crore) in December 2010. India had attracted FDI worth $1.54 billion (Rs 7,185 crore) in December 2009.

However, during the nine month period (April—December) of the current fiscal, FDI declined 23.14 per cent to $16.03 billion over the year ago period, a source told PTI. India had received $20.92 billion in FDI during the same period of the previous fiscal, 2009-10.

In October 2010, the FDI inflows dipped by about 40 per cent to $1.4 billion over the year-ago period. In November too, it dipped by 7 per cent to $1.6 billion.

In view of declining foreign investment inflows, the RBI is considering setting up a panel to find out the reasons for FDI slowdown and suggest ways to encourage it.

According to economists, investors are cautious as the global economic recovery is fragile and uneven, specially in Europe.

“The global economic recovery is not at all strong. Going by the trend, it appears that India will receive less FDI in 2010-11 compared to the previous fiscal,” said Crisil’s Principal Economist D K Joshi. He also said that India was not able to attract very large amounts of foreign investments because of procedural delays.

In 2009—10, India’s FDI had declined to $25.88 billion from $27.33 billion in the previous financial year.

The main sectors that attracted FDI include services (financial and non—financial), telecommunications, housing and real estate, construction activities and power, the source said.

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