Foreign direct investment in India more than doubled in May, data showed on Monday, after being subdued for months due to concerns over corruption, bureaucratic delays and a lack of economic reform. FDI rose to $4.66 billion in May, the second highest monthly inflow in 11 years, according to India's commerce and industry ministry. At the same point last year, the level was $2.21 billion.
Foreign investors have been running shy from India, even with economic growth at above eight percent, amid mounting corruption scandals, concern over red tape, high inflation and perceived government resistance to opening up the economy. India received net FDI of $7.1 billion in 2010-11. "The recent trend of a dip in foreign direct investment inflows appears to have been reversed in the current financial year, where a significant upward trend is evident," the ministry said in a statement.
In April and May - the first two months of the current financial year - FDI jumped 77 percent to $7.79 billion, the data showed. India is expecting more foreign investment as a result of deals including BP's acquisition of a stake in some key Reliance Industries oil fields and resources giant Vedanta's plans to buy a majority stake in oil explorer Cairn India.
Large retailers such as US-based Wal-Mart and France's Carrefour have been aggressively lobbying India's government to open up to foreign supermarket chains as they seek to grow outside saturated Western markets. "This (FDI) is definitely high," Siddhartha Sanyal, chief India economist with Barclays Capital, told AFP, but added it was premature to indicate a clear trend.
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