With government taking steps to improve the ease of doing business and attracting foreign investments, FDI inflows into the services sector jumped by over two and a half times to $5.28 billion in the April-September period of the current fiscal. Also Read - Ola to offer free oxygen concentrators to the needyAlso Read - Samsung Galaxy S20 FE Long-term Review
The sector, which includes banking, insurance, outsourcing, R&D, courier and technology testing, had received foreign direct investment (FDI) worth $1.46 billion during April-September 2015, according to the Department of Industrial Policy and Promotion (DIPP). The government has taken several measures such as fixing timeliness for approvals and streamlining procedures to improve ease of doing business in the country and to attract domestic and foreign investments.
With growth in FDI in important sector like services, overall foreign inflows in the country rose by 30 percent to $21.62 billion during the first half of 2016-17. The services sector contributes over 60 percent to India’s GDP. In 2015-16, foreign investment in services had increased to $6.89 billion from $4.44 billion in 2014- 15. ALSO READ: Telecom sector to generate 83 lakh employment opportunities in next 5 years
FDI in the sector accounts for 18 percent of the country’s total foreign investment inflows. The government is focusing on enhancing services exports. It is organising global services exhibition besides the commerce ministry has worked out a proposal to relax norms in the sector, including higher education to attract foreign players.
The other sectors where inflows have recorded growth are: telecom ($2.78 billion), trading ($1.48 billion), computer hardware and software ($1.03 billion) and automobile ($729 million) during April-September 2016-17. Foreign investments are 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 value against other global currencies, especially the US dollar.