In the aviation sector, 100 per cent FDI is allowed under automatic route for MRO (maintenance, repair, overhaul), ground handling, and aircraft purchase.
FinMin had, recently, notified changes in FDI rules that made prior approval of the government mandatory for foreign investments from countries that share a land border with India. Hong Kong was ranked 14th on the list of countries with FDI flows to India, contributing $4.2 billion between April 2000 and December 2019, the data from DPIIT shows. India received FDI worth $2.34 billion from China in the same period.
India has received over USD 20 billion in FDI amid the coronavirus pandemic, Foreign Secretary Harsh Vardhan Shringla said on Tuesday, showcasing the country as one of the most attractive destinations for investment globally.
India has emerged as one of the top three choices for investments in the next 2-3 years, with more than two-thirds of respondents in a survey of multinational companies (MNCs) citing the country as their number one choice for future investments. According to the FDI survey released on Tuesday by CII in association with EY, about half of the respondents see India amongst the top three economies or leading manufacturing destinations of the world by 2025.
Domestic customers will get access to high-quality Swiss products such as watches, chocolates, biscuits, and clocks at lower prices as India will phase out customs duties under its trade pact with the EFTA bloc on these goods over a period of time. India and the four-European nation bloc EFTA signed a trade and economic partnership agreement (TEPA) on Sunday to boost trade and investments between the two regions. The European Free Trade Association (EFTA) members are Iceland, Liechtenstein, Norway, and Switzerland.
The main sectors that receive the maximum foreign inflows include services, computer software and hardware, telecommunications, trading, construction, automobile, and power.
The ministry of home affairs has received more than 20 proposals for foreign direct investment (FDI), including from China and Hong Kong, requiring security clearance between April and May. 'We are vetting some of these proposals which have come from various sectors. One of the applications is from a well known start-up,' an official said. 'We await inputs from Research and Analysis Wing, intelligence agencies, external affairs ministry, and embassies.'
'India-China economic ties are likely to take a hit in the wake of the new situation, but that also provides India with a new opportunity to strengthen its manufacturing base,' points out Dr Rajaram Panda.
There has been a decline in foreign direct inflow from China in the last three years, with FDI coming down to USD 163.77 million in 2019-20, Minister of State for Finance Anurag Singh Thakur informed the Lok Sabha on Monday. Giving details of the total foreign direct investment (FDI) inflow from Chinese companies in India, he said, it was USD 350.22 million in 2017-18, while it declined to USD 229 million in the following year.
For insurance intermediaries like brokers, insurance repositories, third-party administrators, etc, 100 per cent FDI may be permitted.
The inflows came higher in March than in February of 2019-20 despite the lockdown for a week, reports Indivjal Dhasmana.
The draft favoured up to 49 per cent foreign equity in inventory model in the case of 100 per cent made in India products sold through Indian management-controlled platforms with resident Indian founders/promoters.
The approvals would be handled independently by administrative ministries of different sectors.
Billionaire Mukesh Ambani's Reliance Retail on Thursday told the government that complex legal structures have been used by some firms to bypass the country's e-commerce rules which from the very beginning do not allow foreign capital in the inventory-based model. At a meeting called by the commerce ministry on allegations that foreign online retailers created complex structures to bypass foreign investment rules and damage small traders, Amazon urged the government not to issue any clarification until investigations into its business practices had been concluded, sources said. At the meeting, Reliance Retail's representatives said the Indian e-commerce policy does not allow foreign capital in the inventory-based model and foreign investment is allowed only in pure technical infrastructure/ platform that facilitates the meeting of buyer with sellers.
'The belief that FDI will shift from China appears to be a strategy of politicians to keep the media busy, chasing irrelevant news to ward off pressure and questions about the government's plans to deal with COVID,' observes Debashis Basu.
The retail sector seeing a sharp rise in FDI flows is one where the Modi government's policy is not clear and has got a little muddled by its political ideology.
The government on Monday proposed to increase foreign direct investment limit in the insurance sector to 74 per cent, a move aimed at attracting overseas players.
Prices may go up because of higher energy costs, caused by the rise in shipping charges, with commercial vessels taking a longer route to avoid the troubled Red Sea region, the finance ministry said on Monday. Iran-backed Houthi rebels of Yemen are repeatedly attacking ships in the Red Sea. While the global economy is grappling with challenges such as sticky inflation, sluggish growth, and mounting fiscal pressure, India's external sector could face "potential risks" due to the ongoing geopolitical tensions, according to the finance ministry's report on the review of the Indian economy.
The decision would help provide ease of doing business and also lead to larger FDI inflows contributing to growth of investment, income and employment.
Union Minister Ravi Shankar Prasad on Tuesday said foreign investments and innovations are welcome but at the same time, the government is focussed on promoting Indian innovation as well as keen on the country's safety and security. Speaking at the India Mobile Congress 2020, the IT and Telecom Minister said that IT and communications sectors have registered over 7 per cent growth and received one of the highest Foreign Direct Investment (FDI) even during the challenging time of COVID-19.
The Enforcement Directorate has upgraded its Look out Circular (LC) issued against Byju's founder and CEO Byju Raveendran in connection with a FEMA probe, seeking to stop him for going abroad. The earlier such alert meant that immigration authorities had to just intimate the agency about his movements through various ports. Official sources said that the over an year old LC was revised sometime back in light of investors' concerns and ongoing adjudication of a FEMA contravention case against Raveendran and some others.
According to sources, there is a proposal to allow 100 per cent Foreign Direct Investment in single brand retail sector "through automatic route" with certain conditions.
The private sector's new project announcements in the quarter ending March were among the highest on record. The value of new private sector project announcements for the three months ending March 2024 was Rs 9.8 trillion, shows data from tracker Centre for Monitoring Indian Economy (CMIE). This is the second-highest on record in data going back to 2009.
While the UN report said that FDI inflows rose 6 per cent in 2018 to $ 42 billion, the government's own data for the entire FY19 period has shown that inbound equity investments declined for the first time in six years in FY19.
'Gujarat is the frontrunner at present.'
'However, Tamil Nadu's robust automobile ecosystem and Telangana's aggressive incentives make them strong contenders.'
India was for the first time the leading country in the world for FDI, overtaking the US.
As part of it, the govt may permit 26% FDI in insurance broking through the automatic route.
Sectors which attracted maximum foreign inflows during April-June 2019-20 include services (USD 2.8 billion), computer software and hardware (USD 2.24 billion), telecommunications (USD 4.22 billion), and trading (USD 1.13 billion), the commerce and industry ministry data showed.
'India needs many more job creators, both in manufacturing and services, to make it big.' 'For that, the red carpet must be rolled out fully and for all investors without holding back,' suggests Nivedita Mookerji.
The overall FDI policy landscape is changing and can do so faster, says
The dust over the controversy around foreign direct investment (FDI) in the defence sector appears to have settled.
Key sectors that received maximum FDI include services, computer software and hardware, telecommunications, trading, chemicals, and automobile.
The government would try to minimise layers in FDI ceilings.
Gandhi had, on April 12, flagged the issue of alleged takeover of some Indian companies after those became vulnerable in the wake of the economic slowdown.
The BJP lost 15 of the 80 Lok Sabha seats in 2019. Union ministers have been deployed in all 15, tasked with turning the result around.
India already allows 100 per cent ownership of greenfield pharma businesses.
According to the decision, such entities can now first operate through e-commerce and then open brick-and-mortar stores.
It is alleged that the company floated 32 subsidiaries in several tax haven countries to bring foreign funds to India through sham transactions.
A panel led by the secretaries of the DEA and the DIPP would conduct a quarterly review on the pending proposals.
Why India is an FDI magnet. The country satisfies several reconditions to attract FDI.
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