FDI in December up 30.6% to $2bn

However,during the nine month period (April-December) of the current fiscal,FDI declined 23.14 per cent to USD 16.03 billion over the year ago period,a source said.

India had received USD 20.92 billion in FDI during the same period of the previous fiscal,2009-10.

In view of declining foreign investment inflows,the Reserve Bank of India (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.

Meanwhile,another economist said that global recovery,although modest,has thrown up more options for investors in other parts of the world.

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

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

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

Countries including Mauritius,Singapore,US,UK,Netherlands,Japan,Germany and UAE are the major investors in India.