India is fast emerging as a preferred country for foreign investment, as the measures taken by the government led by Prime Minister Narendra Modi over the last eight years have paid off, as evidenced by ever-increasing volumes of FDI inflows. setting new records.
FDI inflow to India reached its highest level at USD 81.97 billion in 2020-21. The information was given by the government during a parliament session. Among global investors, the government said, these trends in FDI from India are an endorsement of its status as a preferred investment destination, the Saudi Gazette reported.
The government reviews FDI policy on an ongoing basis and makes significant changes from time to time to ensure that India remains an attractive and investor-friendly destination.
India’s FDI policy is liberal and transparent. Most sectors are open to FDI under the automatic route. To further liberalize and simplify FDI policy to facilitate doing business and attract investment, reforms have recently been undertaken in such sectors as coal mining, contract manufacturing, digital media, single-brand retail, civil aviation, defence, insurance and telecommunications.
The Minister of State in the Ministry of Commerce and Industry, Som Prakash, reported in a written response in the Rajya Sabha (the country’s Upper House in Parliament) that the country’s FDI under the current government led by Prime Minister Narendra Modi is at its highest point. always input.
This came in response to a question raised by CPI(M) MP John Brittas and Loktantrik Janata Dal MP MV Shreyams Kumar. These MPs from Kerala questioned the government on the steps it has taken to bring global businesses to the country.
MoS Prakash in a written statement said: “The government has launched various initiatives/schemes to promote growth and attract investment in India.” He also noted that due to these initiatives, India jumped to 63rd place in the World Bank’s Ease of Doing Business. [EODB] World Bank Doing Business Report (DBR) 2020 ranking from 142nd in 2014.
The Minister also spoke of having launched a comprehensive reform exercise in the states and union territories to attract investors. He said that these reforms were initiated after consultations between the Department for the Promotion of Industry and Domestic Trade (DPIIT) with state governments in the framework of the Business Reform Action Plan (BRAP).
It should be noted that under this plan, all states and union territories are ranked on the basis of the reforms implemented by them. There are certain designated parameters that are taken into account after the classification is done. “This exercise has helped improve the business environment in every state,” he said.
Speaking about other steps taken by the government to attract investors, Prakash listed an Empowered Secretaries Group that had been formed to accelerate investment in the country. He also highlighted the constitution of Project Development Cells (PDC) to hold investors and stimulate sectoral and economic growth.
A GIS-enabled Industrial Land Bank of India has been launched to help investors identify their preferred location for investment. The National Single Window System (NSWS) was also launched in September 2021 to facilitate clearances for investors, he said.
According to data released by the DPIIT, India’s highest-ever foreign direct investment (FDI) surged 1.95 percent year on year. In terms of top FDI capital inflow investing countries, ‘Singapore’ is at the apex with 27 per cent, followed by the US (18 per cent) and Mauritius (16 per cent) for FY2021 -22.
The main recipient sector of FDI capital inflow during fiscal year 2021-22 was computer software and hardware. It emerged on top with around 25 percent share followed by the service sector (12 percent) and the auto industry (12 percent) respectively, according to the media portal.
Interestingly, despite the COVID-induced pandemic, FDI inflows into the country in 2020-21 were $81.97 billion. Total FDI includes equity capital of unincorporated entities, reinvestment of profits, and other capital.
The manufacturing sector is also seeing a boost with global investors viewing India as a preferred destination. In a huge boost to the economy, FDI capital inflows in manufacturing sectors increased by 76% in fiscal year 2021-22 ($21.34 billion) compared to the previous fiscal year 2020-21 ($12.09 billion). USD).
FDI inflows have increased by 23% post-COVID (March 2020 to March 2022: USD 171.84 billion) compared to reported FDI inflows before COVID (February 2018 to February 2020: 141 100 million USD) in India. In the ‘Computer Hardware and Software’ sector, the top FDI capital inflow recipient states are Karnataka (53%), Delhi (17%) and Maharashtra (17%) during FY2021-22.
Karnataka is the top host state with a 38% share of the total FDI capital flow reported during FY2021-22, followed by Maharashtra (26%) and Delhi (14%). Most of Karnataka’s capital inflow was recorded in the ‘Software & Hardware’ (35%), Auto Industry (20%) and ‘Education’ (12%) sectors during FY2021-22.
(Only the headline and image in this report may have been modified by Business Standard staff; all other content is auto-generated from a syndicated source.)