Mumbai:  The net foreign direct investment (FDI) inflow in India is expected to improve sharply to USD 19.5 billion during FY 12 as compared to USD 7.1 billion in FY 11 on account of robust and sustainable economy, the Centre for Monitoring Indian Economy (CMIE) said in its monthly review.

As per the review, FDI inflows during the first two months of FY 12 were much higher at USD 7.4 billion compared to USD 3.6 billion during the corresponding period of FY 11.

Since higher FDI inflows are more than made up for the lower FII inflows, total foreign investments during April-May 2011 were much higher at USD 9.7 billion compared to USD 7.8 billion during April-May 2010.

"We maintain that FDI inflows into India will continue to be robust as the Indian economy will continue to remain amongst the fastest growing economies of the world. We also expect FII inflows into the Indian equity markets to continue in the coming months for the same reasons," CMIE said.

The economic growth in India is also sustainable and driven by the domestic demand. The high inflation and supply shortages driving it is an indication of a strong underlying private consumption demand in the country. Overseas investors are likely to be keen on capitalizing on it, it said.


(Agencies)