Bid For Higher FDI Inflow
- Govt expects FDI inflows to rise by 40-45 percent in 2016.
- A composite foreign investment cap was introduced this year by clubbing all forms of overseas investments to define sectoral limits.
- Govt also relaxed e-commerce norms for foreign companies having manufacturing facilities in India.
- Govt plans to put 98 percent of sectors, which are open to foreign investments.
- India needs around $1 trillion worth investments between 2012-13 and 2016-17.
Bullish on a series of reforms unveiled in 2015, the government expects FDI inflows to rise by 40-45 percent in the New Year while further steps could be on the anvil to attract foreign capital.
As per the latest available figure for 2015, FDI inflows during the January-September period has increased by 18 percent to $26.51 billion. In 2014, India had received FDI worth $28.78 billion as compared to $22 billion in 2013.
FDI will grow by 40-45 percent in 2016 despite the global slowdown. The government has taken a number of policy measures this year.
Amitabh Kant, Secretary, Department of Industrial Policy and Promotion (DIPP)
The sectors that have attracted maximum FDI this year include services, computer hardware and software, telecom, automobile and trading. Singapore is the top source for FDI coming into India, followed by Mauritius, UK, Japan, the Netherlands and the US.
In a bid to streamline the FDI structure, the government this year introduced a composite foreign investment cap by clubbing all forms of overseas investments to define sectoral limits. It has also relaxed e-commerce norms for foreign companies having manufacturing facilities in India.
Kant said that the steps announced to improve ease of doing business would help India in becoming the most easiest place for investors. He said that the government is planning to put 98 percent of sectors, which are open to foreign investments, under the automatic route so that businessmen won’t need to visit the Finance Ministry or ‘Udyog Bhavan’ for any approval.
India’s ranking in the World Bank’s report on the ease of doing business improved to 130th position this year from 142nd last year out of 189 countries. The Prime Minister has set a target to bring this rank to top-50.
For the first time, states have also been ranked in terms of ease of doing business. Gujarat topped the World Bank-compiled ranking of Indian states for bringing in reforms to improve ‘ease of doing business’.
Foreign Direct Investment is important for the country as it needs around $1 trillion worth investments between 2012-13 and 2016-17, the 12th Five Year Plan period, to fund infrastructure growth covering sectors such as ports, airports and highways.
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