RTTNews - India's foreign direct investment or FDI in February fell to $1.4 billion from $5.67 billion for the same month in the preceding year, due to impact of the global credit crunch, reports say.

As per official figures, the cumulative FDI inflows during April-March 2009 were $25.35 billion, up from $20.13 billion in the corresponding period a year ago. The country was experiencing a steep fall in foreign investments since October 2008.

An industry chamber economist reportedly said reviving the FDI inflows would be a key challenge for the new UPA government, which is likely to come out with a much clearer policy. The changes in the FDI policy announced in February have created a lot of confusion among both domestic and foreign investors.

As per the Press Note 2, 3 and 4, FDI can flow into sectors, which are not allowed to foreign investments through a circuitous route. According to a latest World Investment Report of the UNCTAD, the current financial crisis was to have a negative impact on FDI inflows in the short term. Both FDI inflows and outflows from the US and European markets may slowdown, it added.

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