Snapping a declining trend in foreign direct investment (FDI) inflows for three successive months, India received FDI worth $2.11 billion in September, an increase of about 40 per cent over the same month last year, an industry ministry official said.
FDI inflows in September 2009 were $1.51 billion. Inflows so far this year are worth $38 billion.
The sectors which attracted foreign investment included services, telecommunication, construction activities and computer software and hardware.
The maximum investment came from Mauritius, the US, the UK, Singapore, the Netherlands and Japan. The government has said it was considering liberalising FDI in multi-brand retail and defence sectors.
For the April-September period of 2010-11, however, inflows declined about 28 per cent to $11 billion compared to $15.3 billion in the same period last year, the official added.
According to an expert, weak global economic recovery is a reason for the dip in FDI inflows.
"Sluggish recovery in the major western economies is one of the reasons for declining FDI in India," international trade expert with India's prestigious Indian Institute of Foreign Trade (IIFT) Rakesh Mohan Joshi said.
FDI inflows had been dipping for three months in a row before September.
In August, investment was down 60 per cent to $1.33 billion from the same month a year-ago. In July, inflows were at $1.78 billion, a dip of 49 per cent; in June they were at $1.38, down 46 per cent.
The foreign investment remained low-key despite a recent United Nations Conference on Trade and Development (UNCTAD) survey showing India would remain the second-most important FDI destination for transnational corporations during 2010-2012, next only to China.
In its latest 'World Investment Prospects Survey 2010-2012', UNCTAD had said transnational 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.