New Delhi: With the government taking steps to improve the ease of doing business and attract investments, foreign direct investment (FDI) inflows into the services sector grew by over 46 per cent to $3.25 billion in fiscal year 2014-15.
The services sector, which includes banking, insurance, outsourcing, R&D, courier and technology testing, had received FDI worth $2.22 billion in FY14.
However, the total foreign inflow in 2014-15 in the services sector was low as compared to 2012-13 when it was $4.83 billion, data from the Department of Industrial Policy and Promotion (DIPP) showed.
The government has announced a series of steps such as fixing timeliness for approvals to improve the ease of doing business in the country and attract domestic as well as foreign investments.
In step with the growth in FDI in important sectors like services, overall foreign inflows in the country too rose 27 per cent to $30.93 billion during the previous fiscal year.
The amount was $24.29 billion in 2013-14.
Services contribute about 60 per cent to India's GDP and it receives high foreign inflows in this sector.
The other sectors where inflows have recorded growth telecommunications ($ 2.89 billion), automobiles ($2.57 billion) and computer software and hardware ($2.20 billion).
To attract investment in the services sector, the government has raised the FDI cap in insurance sector to 49 per cent from 26 per cent. The policy was also relaxed in other sectors such as defence, railways and medical devices.
Foreign investments are considered crucial for India, which needs around $1 trillion in the next five years to overhaul its infrastructure sector such as ports, airports and highways to boost growth.
Growth in foreign investments helps improve the country's balance of payments situation and strengthen the rupee.
