August 28, 2019
FDI policies have been progressively liberalized, resulting in India attracting record FDI inflows
FDI into India in 2018-19 (US$64.4 billion) was the highest ever received for any financial year
Despite global FDI inflows reducing by 13% in 2018, India has remained a preferred destination
Some of the benefits from the FDI reforms are in the sectors of coal, manufacturing, and retail
Though India has been recording higher foreign direct investment (FDI) inflow every passing year, it has the potential to attract far more foreign investment through further policy amendments. Accordingly, the Union Cabinet has approved the proposal for a review of Foreign Direct Investment in various sectors, as per an official announcement on August 28.
Some of the major expected benefits from the FDI Policy Reform are:
The above amendments to the FDI Policy are meant to liberalize and simplify the FDI policy to provide ease of doing business in the country, leading to larger FDI inflows and thereby contributing to the growth of investment, income and employment.
Global FDI inflows have been facing headwinds for a few years. As per UNCTAD’s World Investment Report 2019, global FDI flows slid by 13 per cent in 2018 – the third consecutive annual decline. Despite the dim global picture, India continues to remain a preferred destination for global FDI flows.
Foreign Direct Investment (FDI) is a major driver of economic growth and a source of non-debt finance for the economic development of India. The Government has put in place an investor-friendly policy on FDI, under which FDI up to 100 per cent is permitted on the automatic route in several sectors (including Defence, Construction Development, Trading, etc).
FDI policies have been progressively liberalized in recent years, resulting in India attracting record FDI inflows over the past 5 years. Total FDI into India in 2018-19 i.e. US$64.4 billion (provisional figure) was the highest ever FDI received for any financial year.