Hello Anurag,
Looks like problem is with the string you are sending as input.
What is the operation? GET / POST ?
However,
Did you try to send a simple string as input first ? say for example as below. Is it working ?
/sap/opu/odata/sap/MyServiceName/MyFunctionImportName?I_XML_VALUE='Anurag Bajaj'
Regards,
Ashwin