Reflecting fragile recovery in the world's major economies, foreign direct investment (FDI) into India dipped 60 per cent in August to $1.33 billion. This is the third consecutive month the figure has fallen .
The inflows in August 2009 were $3.26 billion.
Contrary to the smart recovery in the domestic economy and a rebound in exports, overseas investment show a slackening trend in the current financial year, an official told PTI.
For the April-August period of 2010-11, FDI inflows declined 35 per cent to $8.92 billion, compared to $13.8 billion in the same period last year, he added.
"The main reason for the decline in FDI is the slump in major western economies like the US and Europe," said Rakesh Mohan Joshi, international trade expert with Indian Institute of Foreign Trade.
Crisil chief economist DK Joshi said: "This is not a good news for Indian economy. It reflects the global economic recovery is still fragile."
Foreign investment in July and June were $1.78 billion and $1.38 billion, respectively - a 49 per cent dip and 46 per cent dip, repectively, from the year-ago period.
The sectors which attracted foreign investment included services, telecommunication, infrastructure and computer software and hardware, the official said.
The country received maximum investment from Mauritius, the US, the UK, Singapore, the Netherlands and Japan.
The government has recently floated discussion papers for public comments to liberalise FDI in multi-brand retail and defence sector.
The foreign investment remained low-key despite a recent United Nations Conference on Trade and Development survey showing that India would remain the second-most important FDI destination for trans-national corporations during 2010-2012, next only to China.
In its latest 'World Investment Prospects Survey 2010-2012', the UNCTAD said trans-national corporations remain buoyant about investment prospects in China, India and Brazil.
FDI for 2009-10 at $25.88 billion was lower by five per cent from $27.33 billion in the previous financial year.