Foreign direct investment (FDI) in the country grew 31 per cent year-on-year to $27.5 billion during the year 2011 (January-December) against FDI inflows of $21 billion in the previous year, as the gloomy economic outlook in advanced countries deflected investments to safer destinations.
Service sector attracted the highest FDI with capital flows into the sector rising 20 per cent. Telecom, housing and real estate and construction and power were the other sectors that attracted heavy FDI inflows, data released by the department of industrial policy and promotion showed.
Mumbai accounted for around 40 per cent of the FDI inflows, followed by Delhi-NCR region, Bangalore and Ahmedabad.
Official sources attribute the expansion in FDI to the government's move to liberalise foreign direct investment in the country.
The government has allowed 100 per cent FDI in single brand retail besides easing norms in pledging of shares for external commercial borrowings.
The major sources of FDI into the country were Mauritius, Singapore, US, UK, the Netherlands, Japan, Germany and the UAE.
FDI inflows into the country had declined to $19.42 billion in 2010-11 financial year, from $25.83 billion in 2009-10.