Major FDI destinations, including Maharashtra and the National Capital Region, witnessed a sharp fall in inflows during the April-October period of the current fiscal, according to data of the Department of Industrial Policy and Promotion.
Maharashtra and the National Capital Region (NCR) attracted over 50 per cent of the country's total foreign direct investment (FDI) between April 2000 and October 2013. Delhi NCR includes parts of Uttar Pradesh and Haryana as well.
During the first seven months of the current fiscal, FDI into Maharashtra, Dadra & Nagar Haveli and Daman & Diu plunged to USD 2 billion from USD 6.51 billion in the same period last year.
Similarly, foreign inflows into NCR along with Haryana have declined to USD 1.85 billion from USD 2.33 billion in the year-ago period, the data showed.
However, government officials are optimistic that the recent decisions on relaxing the FDI policy in about dozen sectors would help in attracting more foreign investment.
"The government has approved UK-based Tesco's proposal to set up supermarkets in India with a Tata Group company. Most likely they would open stores in Maharashtra," the official said.
Tesco has a plan to initially invest USD 110 million.
The government has relaxed FDI norms in sectors such as telecom, defence, PSU oil refineries, commodity bourses, power exchanges and stock exchanges.
Among other states, Tamil Nadu, West Bengal, Sikkim and Rajasthan also saw decline in foreign investments.
Total FDI into the country has declined by 15 per cent to USD 12.6 billion during April-October 2013.
India will require an estimated USD 1 trillion between 2012-13 and 2016-17, the 12th Five Year Plan period, to fund infrastructure growth of ports, airports and highways.
A decline in FDI has hurt the rupee, which depreciated to a record low of 68.85 against the US dollar on August 28 last year. It has strengthened since then to around 62-level.
According to experts, although the government has relaxed FDI norms in several sectors, the global players are waiting for the formation of the new government at the Centre.