Foreign direct investment into the country is expected to rebound in the coming months on account of India's high economic growth, and steps to further improve the business environment of India, the Economic Survey said on Tuesday. The rise in global uncertainty in the wake of the Russia-Ukraine conflict, FDI equity inflows in the manufacturing sector in the first half of the current fiscal (April-September) fell below its corresponding level in the first half of 2021-22, the document, which was tabled in Parliament, said. The monetary tightening at the global level has further restricted the FDI equity inflows, the survey said.
Finance Minister Nirmala Sitharaman on Thursday asked India Inc to take advantage of the policies and reforms undertaken by the government and no longer hesitate to invest more and expand capacities. Sitharaman also asked the industry to partner with the government for skilling the youth and also to engage with the government throughout the year, and not just before the Budget.
Total foreign direct investment (FDI) inflow to India declined to $74.01 billion in the calendar year 2021, which is 15 per cent lower from $87.55 billion recorded in the previous year, the ministry of commerce & industry said on Wednesday. The FDI inflow includes equity inflow, equity capital of unincorporated bodies, re-invested earnings and other capital. "FDI is largely a matter of commercial business decisions and FDI inflow depends on a host of factors such as availability of natural resource, market size, infrastructure, political and general investment climate as well as macro-economic stability and investment decision of foreign investors.
Opposition National Democratic Alliance and estranged United Progressive Alliance ally Trinamool Congress on Friday criticised the decision to allow Foreign Direct Investment in multi-brand retail, saying government has surrendered to crony capitalism and feared that the policy will spell doom for farmers and small traders.
The Union Cabinet on Thursday approved a proposal to allow 100 per cent foreign direct investment (FDI) in public sector refiners, expanding the scope for FDI in the privatisation of Bharat Petroleum Corporation Ltd (BPCL). The approval by the Cabinet will enable the sale of the government's 52.98 per cent stake in BPCL to a foreign buyer, and, at the same time, will open the door for FDI in other public sector companies in the oil sector put up for privatisation.
FDI is a major driver of economic growth and a source of non-debt finance for the economic development of the country. The government has put in place an investor-friendly policy on FDI, under which investment up to 100 per cent is permitted on the automatic route in most sectors/ activities. At $ 64.37 billion, FDI in 2018-19 is the highest ever investment received for any financial year.
The government made these changes in the third edition of the Consolidated FDI Policy Circular, a ready reckoner on foreign investment-related regulations that was released in New Delhi on Thursday.
However, in recent times, the clout that trader bodies such as CAIT and other organisations like Swadeshi Jagran Manch and Laghu Udyog Bharati has is steadily increasing. Earlier this year, trader bodies were able to convince the government not to extend the deadline for implementation of the new norms in FDI policy on e-commerce.
The resilience of the economy and strength of domestic demand will continue to make India an engine of growth amid the rapidly evolving global trade landscape as a result of US tariffs, Finance Minister Nirmala Sitharaman said in London on Tuesday.
The Confederation of All India Traders (CAIT) representing 70 million traders has written to Union Commerce Minister Piyush Goyal, drawing his attention to the alleged violations of laws and regulations by quick commerce (qcom) companies.
To those who ask, "Is all this really worth it? Why can't domestic demand fill the gap?", it is important to remind them that only 13 economies since the Second World War have grown at 7 per cent or more for 25 years -- like India needs to. They all had one thing in common: Strong export growth underpinned by strong global engagement, explains Sajjid Z Chinoy.
Despite all the noise around India's chance to leverage the China-plus one strategy, India's share of global foreign direct investment (FDI) inflows fell from 3.5 per cent in the first nine months of 2022 to 2.19 per cent in the same period in 2023, according to OECD data. The sharp drop of 54 per cent is much steeper than the overall global FDI inflow decline of 26 per cent in the first nine months. FDI inflows to China have fallen dramatically from a share of 12.5 per cent in the first nine months of 2022 to only 1.7 per cent in the same period in 2023.
Foreign direct investments (FDI) into the country grew 19 per cent to $59.64 billion during 2020-21 on account of measures taken by the government on the fronts of policy reforms, investment facilitation and ease of doing business, the commerce and industry ministry said on Monday. Total FDI, including equity, re-invested earnings and capital, rose 10 per cent to the "highest ever" of $81.72 billion during 2020-21 as against $74.39 billion in 2019-20. "FDI equity inflow grew by 19 per cent in 2020-21 ($59.64 billion), compared to 2019-20 ($49.98 billion)," the ministry said in a statement. In terms of top investor countries, Singapore is at the top with 29 per cent share.
Amid domestic traders continuously complaining alleged violations of FDI norms by foreign online players, Commerce and Industry Minister Piyush Goyal on Friday said the ministry will "very shortly" come out with certain clarifications on the e-commerce sector. Goyal said the ministry is not changing any policy on e-commerce for foreign direct investment as the policy is crystal clear. "We will also come out with the e-commerce policy and whatever clarifications... Certain instances have come to our notice where the policy is not being followed in letter and spirit, we will obviously be clarifying that very shortly," he told reporters in New Delhi.
The government liberalised FDI policy in sectors, including multi-brand retail, single-brand retail, commodity exchanges, power exchanges, broadcasting, non-banking financial institutions and asset reconstruction companies.
IKEA, the euro 25-billion Scandinavian retailer, wants some alterations in the guidelines for foreign investment in single-brand retail before it invests in India.
A letter reversing the decision was sent by Rajasthan Chief Minister Vasundhara Raje to Commerce and Industry Minister Anand Sharma.
Foreign direct investment into India increased by 60 per cent to $4.44 billion in April as against $2.77 billion in the same month last year, government data showed on Wednesday. Total FDI, including equity, re-invested earnings and capital, rose 38 per cent to $6.24 billion in April this year, as against $4.53 billion in April 2020, as per the data. "During April, 2021 FDI equity inflows amounting to $4.44 billion were reported in the country which is an increase of 60 per cent over the FDI equity inflow of April, 2020 ($2.77 billion)," the commerce and industry ministry said in a statement.
Minister says states have no legal way to revoke decision.
Following the government move to allow FDI policy in the civil aviation sector, Chairman of debt-ridden Kingfisher Airlines Vijay Mallya on Wednesday said the carrier was in talks with foreign airlines.
In response to the panic triggered by Trump's trade policies, the RBI net sold approximately $43 billion in the second half of FY25 to curb volatility, as the rupee plunged to a low of 87.95 per dollar in February this year.
As part of it, the govt may permit 26% FDI in insurance broking through the automatic route.
Foreign direct investment (FDI) in India grew 40 per cent to USD 51.47 billion during April-December 2020-21, according to government data released on Thursday.
Total foreign direct investment into India rose 2 per cent to the "highest ever" $83.57 billion in 2021-22 on account of various measures like policy reforms and ease of doing business taken by the government, the commerce and industry ministry said on Friday. Total FDI comprises equity inflows, reinvested earnings and other capital. In 2020-21, the inflow stood at $81.97 billion. It was $74.39 billion in 2019-20 and $62 billion in 2018-19. "India has recorded the highest ever annual FDI inflow of $83.57 billion in 2021-22," the ministry noted in a statement.
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.
FDI equity inflows into the country during April-January 2020-21 grew by 28 per cent to $54.18 billion, according to the Commerce and Industry Ministry data released on Monday. Foreign direct investment (FDI) inflows during April-January 2019-20 stood at $42.34 billion. Total FDI (which includes reinvested earnings) during the 10-month period in FY21 increased by 15 per cent to $72.12 billion over the year-ago period.
The government decision to permit 100 per cent foreign direct investment in medical devices will take effect from January 21, the Commerce and Industry Ministry said on Tuesday.
Net foreign direct investment (FDI) in India, inflows minus outflows, declined sharply in April-August this year to $2.99 billion from $18.03 billion in the same period last year on moderation in global activities and a rise in repatriation. The Reserve Bank of India's data (October 2023 bulletin) said FDI in India was $7.28 billion and FDI by India, that is money invested abroad from the country, was $4.28 billion in April-August 2023. As for 2022, FDI in India was $22.79 billion and FDI by India was $4.76 billion in April-August.
For insurance intermediaries like brokers, insurance repositories, third-party administrators, etc, 100 per cent FDI may be permitted.
The private sector, the Prime Minister said, needs an environment in which enterprise can flourish and create both jobs and stimulate growth to ensure that it remains inclusive.
FDI in brownfield investment has resulted in acquisition of domestic drug-manufacturing firms by multinational companies.
However, that could only be for sectors where 100 per cent FDI is allowed under the automatic route and pose no risk to national security.
The CAIT has complained to the Commerce Ministry to take action against these companies.
The Department of Industrial Policy and Promotion (DIPP) under the Ministry of Commerce has called a meeting on July 10 to discuss the foreign direct investment (FDI) policy in the cigarette industry.
The FIPB, headed by Department of Economic Affairs Secretary Arvind Mayaram, discussed 30 foreign direct investment proposals, including 10 from pharma sector.
The US Trade Representative noted that India's average applied tariff rate stood at 17% per cent, the highest of any major world economy.
Plugging policy loopholes, the Indian government has spelt out the rules for FDI-funded wholesale or cash-and-carry trading ventures, restricting their merchandise sale to registered retailers and not directly to consumers.
'That way you're not hostage just to US sort of exports to India.'
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