Foreign investment (FDI) to India breaches the $5 billion mark in June

India’s foreign investment continues to gather pace in the new financial year. After growing by 77% in the first two months (April & May), foreign investment has zoomed 310% (four times) in June.

Total long term foreign investment (into companies and such like, excluding stock markets), was $5.656 billion in June, against
$1.380 billion received in the same month in 2010. In comparison, the total foreign investment (FDI) was only around $25 billion for the whole of last year.

It is the second highest foreign direct investment to come to India in a single month since the turn of the century eleven years ago.

The reason for the spike may lie in some of the mega deals announced recently, such as the $5.5 billion sale of Essar’s stake in Vodafone Essar to the British partner and British Petroleum’s $7.2 billion investment into Reliance’s oil and gas assets.

“FDl equity inflows, for the month of June, 20 11, have been received from the Reserve Bank of India. The figures indicate that the trend of high FDI equity inflows, since the beginning of the present financial year, is being maintained,” India’s ministry of commerce and industry said in a statement.

FDI equity inflows, for the first quarter of the current financial year (April-June, 2011), have been US $ 13.441 billion, an increase of almost 133%, in US $ terms, for the corresponding period of the last financial year.

Similarly, for the first six months (January-June, 2011) the total FDI has been S $16.832 billion, an increase of nearly 57% over the $10.740 billion received during the same period last year.

The increase is likely to be come as a major relief to the Government, which had been puzzled by the drying up of foreign investment into India during the last financial year. After remaining at around $35 billion per year even during the recession, last year saw total FDI decline to $25 billion.

Finally, India’s FDI numbers start looking up with $7.8 billion in two months