Reasons for Low FDI

  • The RBI has said that environment sensitive policies and procedural delays are hurting foreign direct investment. 
  • The moderation in FDI inflows to India during April-November 2010 has been driven by sectors such as construction,mining and business services.
  • A major reason for the decline in inward FDI is reported to have been the environment sensitive policies pursued,as manifested in the recent episodes in the mining sector,integrated township projects and construction of ports,which appear to have affected the investors sentiments.
  • The report adds that persistent procedural delays,land acquisition issues and availability of quality infrastructure have added to the environment related issues.
  • These factors,which are more structural in nature,if addressed expeditiously,could raise the share of India in the projected FDI flows to EMEs in the near future.


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