$22.5bn FDI received in first quarter FY2024-25
Sixty-seven per cent or US$667 billion of Foreign Direct Investment (FDI) has been received during the last 10 financial years (2014-2024) out of the US$991 billion recorded during the first 10 years (2014-24).
FDI equity inflow in the manufacturing sector increased by 69% to US$165 billion in 2014-2024, rising from US$98 billion before that, the Ministry of Commerce and Industry said on 20 Dec in a yearend review of FDI inflow https://www.cii.in/.
In the first quarter of FY 2024-25, FDI inflow reached US$22.5 billion, a 26% increase compared to US$17.8 billion in the first quarter of FY 2023-24 https://www.investindia.gov.in/.
To promote Foreign Direct Investment (FDI), the Government has put in place an investor-friendly policy, wherein most sectors, except certain strategically important ones, are open for 100% FDI under the automatic route without government approval, elaborated the ministry. Almost 90% of the FDI inflow is received under the automatic route https://fieo.org/.
The Ministry said the Department of Promotion of Industry and Internal Trade (DPIIT) is responsible for the formulation of FDI Policy, enforced through rules notified under the Foreign Exchange Management Act, 1999 (FEMA), which is administered by the Department of Economic Affairs (DEA) and regulated by the Reserve Bank of India (RBI).
The Foreign Investment Facilitation Portal (FIFP) manages proposals received under the government route and forwards them to concerned ministries.
FDI is permitted through two entry routes – the Automatic Route and the Government Route. Under the Automatic Route, no prior approval is required from the Government or RBI, with most sectors open for 100% FDI. In FY 2023-24, over 98% of FDI equity inflow was received through this route. The Government Route requires prior approval from the respective sector ministries or departments via FIFP and applies to investments in notified sectors or activities, as well as investments from countries sharing land borders with India https://www.ibef.org/ .
FDI is prohibited in notified sectors or activities, including Lottery Business, Gambling and Betting, Real Estate, Manufacturing of Tobacco, Atomic Energy, and other sectors not open for private investment, it said.
FDI Reforms in India: The Government has progressively liberalized FDI policies across sectors between 2019 and 2024. In 2019, 100% FDI under the automatic route was allowed in coal and contract manufacturing, while 26% FDI in digital media was allowed under the government route https://sbi.com.in/ .
In 2020, 100% FDI was permitted in insurance intermediaries under the automatic route, and revised limits were set for the Air Transport and Defence sectors.
In 2021, FDI in the insurance sector was increased to 74%, Telecom was included under the automatic route, and PSUs in the petroleum and natural gas sector were opened for FDI. In 2022, 20% FDI in LIC was permitted under the automatic route. In 2024, the space sector was liberalized, said the ministry. Fiinews.com
