Analysts feel that if the trend continues, the FDI in the current financial year would well cross USD 30 billion, a development which will have a positive effect on rupee in the foreign exchange market.
In the face of selling pressures in the stock market from the foreign institutional investors and rising trade deficit, the rupee has declined by about 15 per cent since August. While the FII inflows are considered "hot money", the FDI is quite stable.
The improvement in FDI inflows in November comes after two months of declining trend. The country had received USD 1.62 billion overseas investment in November 2010.
In September and October, the inflows were down by 16.5 per cent and 50 per cent year-on-year respectively. During the April-November period, the FDI was up by 62.81 per cent from USD 14.02 billion a year ago. "At this rate we would be able to cross USD 30 billion figure by end of the current fiscal," the official added.
In 2010-11, FDI into equity had dipped 25 per cent to USD 19.43 billion, from USD 25.6 billion in 2009-10. In 2008-09, FDI stood at USD 27.3 billion.
Mauritius, Singapore, the US, the UK, the Netherlands, Japan, Germany and the UAE are major sources of FDI for India. Sectors which attracted the maximum funds include services, construction activities, power,computers and hardware, telecom and housing and real estate.