FDI into India has been continuously growing as the country has one of the most facilitative policies to attract overseas investors. Commerce and industry minister PiyushGoyal said India is witnessing a quick and sustained recovery in economic performance measures amid the Covid-19 pandemic. The country has seen a growth in FDI in the first initial nine months of FY21.
India has been consistently opening up to global investors and encouraging business through strategic connection, strengthening our economic decisions for the future and introducing valuable reforms and facilitation measures to promote greater international involvement. FDI flows have been continuously growing, which has increased up to 13% to about $ 40 million, during April-September 2020. Minister added that 100% FDI is allowed through automatic route in almost all sectors for specific sectors such as telecom, media, pharmaceuticals, insurance, and government consent necessary for foreign lenders. There are nine sectors where FDI is forbidden: lottery business, gambling and betting, chit funds, real estate businesses and manufacturing of cigars, cheroots, cigarillos and cigarettes using tobacco.
Sectors which attracted maximum FDI
FDI had plunged by 60% from the year-ago period to $6.5 billion, information delivered by Department for promotion of industry and internal trade (DPIIT):
Under the government, acceptance route, foreign investors have to take prior acceptance of the respective ministry/department. Government’s reforms focus on capital, labour, land and removing barriers to new businesses. Even before the beginning of the pandemic, India was rapidly announcing a slew of reform measures to improve the economy and productivity levels.
Recent updates
According to the announcement, some of the problems foreign investors currently face in investing in India are inconsistency in the interpretation of laws, frequent changes to the rules and lack of coordinated approach amongdifferent regulators in the country. With relaxed FDI norms, defence production will be among the areas that will be looked at for fresh overseas investments in the months ahead while easing businesses’ compliance burden will be a priority area.Thus, India can become a significant foreign investment hub by solving some of these problems.
FDI is significant as India would require considerable investments in the coming years to overhaul its infrastructure sector to boost growth. Healthy growth in foreign inflows helps to maintain the balance of payments and the value of the rupee. The administration schemes would make the FDI strategy more speculator cordial and eliminate the approach impedes venture inflows into the nation.
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