New Delhi(PTI): Foreign Direct Investment into India through the approval route shot up 162 per cent to USD 1.91 billion in the first 10 months of the current fiscal, indicating that government’s effort to improve ease of doing business and relaxation in FDI norms may be yielding results.
During the full 2013-14 fiscal, India had received USD 1.18 billion FDI through the government approval route, according to the figures collated by the Department of Industrial Policy and Promotion (DIPP).
“The FDI figures during April-January period clearly reflect that the government is giving faster clearance to the proposals. It is reacting fast on the needs of foreign investors,” said a senior official in the Commerce and Industry Ministry.
Some experts think likewise.
Head of Tax and expert on FDI with corporate law firm Amarchand & Mangaldas Krishan Malhotra said: “Relaxation of FDI norms in some sectors and steps to improve ease of doing business have started generating positive environment in the country.
“Foreign investors are very positive about India. Sentiments are also improving. There is lot of positivity in the business environment.”
Although in most of the sectors foreign investment is permitted through automatic route, FDI in few sectors including pharmaceutical, defence and retail are permitted only through the approval of Foreign Investment Promotion Board (FIPB).
FIPB is an inter-ministerial body under the Finance Ministry which approves foreign investments related proposals.
During the April-January period, the total foreign inflows too have increased by 36 per cent year-on-year, to USD 25.52 billion.
In January, the foreign direct investment (FDI) in India more than doubled to USD 4.48 billion, the highest inflow in the last 29 months.
In 2013-14, FDI stood at USD 24.29 billion compared with USD 22.42 billion a year earlier.
Healthy inflow of foreign investments into the country helped Indiaâ€™s balance of payments (BoP) situation and stabilised the value of rupee.
India is estimated to require around USD 1 trillion over five years to overhaul its infrastructure sector, including ports, airports and highways to boost growth.
Government is taking steps to boost FDI in the country. It has relaxed FDI norms in sectors including insurance, railways and medical devices.
The government has also taken a series of steps to improve ease of doing business that include having a timeline for clearance of applications, de-licensing the manufacturing of many defence products and introduction of e-Biz project for single window clearance.