Foreign investment in India jumps 300%

Foreign direct investment (FDI) into India jumped more 300 percent in June to $5.65 billion, the second highest monthly inflow in the last 11 years, official data showed Monday. The figure, up from $1.38 billion in June last year, came as a rare piece of welcome financial news for Asia's third-largest economy, where data recently has showed the economy slowing under a slew of aggressive interest rate rises to curb nearly double-digit inflation. The inflow figures upheld a trend showing a revival of foreign investment interest. Investors had 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. "The figures indicate the trend of high FDI equity inflows since the beginning of the present financial year (on April 1, 2011) are being maintained," India's commerce ministry said in a statement. In the last financial year to March 2011, FDI inflows slid 25 percent to $19.43 billion on the back of an uncertain global climate following the 2008 global financial crisis. In the April-June period of the current fiscal year to March 2012, FDI rose by 133 percent to $13.44 billion from $5.77 billion in the same period last year, the ministry said. India is expecting more foreign investment as a result of deals including BP's acquisition of a stake in 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. Foreign investment is vital for India, which needs to fund a $1 trillion scheme over the next five years to overhaul its dilapidated ports, airports, highways and other infrastructure seen as key to boosting economic growth.