The slump in the global economy is taking a toll on foreign investment into the country as well as India Inc’s global expansion.
According to the latest data released by the RBI, net foreign direct investment (FDI)—which is the difference between inflow and outflows—is estimated to have declined over 37% to $3.2 billion during April-May 2012, compared to over $5 billion a year ago.
In fact, net FDI during the first two months of the current fiscal is almost the same as the level seen in May 2011.
Within this, investment by overseas companies in India is estimated to have dipped by around the same margin to $4.3 billion, while Indian firms, too, seemed to have gone a tad slower in their overseas foray. Against the peak levels of outflows of almost $1.3 billion in February, Indian companies invested just a little over $500 million in May 2012.