India’s Foreign direct investment (FDI) has dropped by 78% in June to USD 1.24 billion compared to USD 5.66 billion in the same month last year due to lack of economic reforms and dismal global growth outlook. On top of that concerns about corruption, lack of political stability at the central government and worsening macro-economic condition have also lowered the investors’ confidence significantly.
For the first quarter (April-June) of the current financial year, total FDI dropped by 67% compared to same period last year to USD 4.43 billion. Also Reserve Bank of India governor, D Subbarao has asked government to follow Singapore government model in order to attract more investments. Indian government now needs to work on economic and fiscal reforms continuously to revive investors’ sentiment and boost foreign inflow into the economy to support high economic growth.