FDI in India

By Spotlight - 26-03-2019

n AB and Actoserba Active Wholesale Pvt Ltd, according to Department of Industrial Policy and Promotion (DIPP).

  • Cumulative equity foreign direct investment (FDI) inflows in India increased 40 per cent to reach US$ 114.4 billion between FY 2015-16 and FY 2016-17, as against US$ 81.8 billion between FY 2011-12 and FY 2013-14.
  • Walmart India Pvt Ltd, the Indian arm of the largest global retailer, is planning to set up 30 new stores in India over the coming three years.
  • US-based ecommerce giant, Amazon, has invested about US$ 1 billion in its Indian arm so far in 2017, taking its total investment in its business in India to US$ 2.7 billion.
  • Kathmandu based conglomerate, CG Group is looking to invest Rs 1,000 crore (US$ 155.97 million) in India by 2020 in its food and beverage business.
  • International Finance Corporation (IFC), the investment arm of the World Bank Group, is planning to invest about US$ 6 billion through 2022 in several sustainable and renewable energy programmes in India.
  • SAIC Motor Corporation is planning to enter India’s automobile market and begin operations in 2019 by setting up a fully-owned car manufacturing facility in India.
  • Soft Bank is planning to invest its new US$ 100 billion technology fund in market leaders in each market segment in India as it is seeks to begin its third round of investments.
  • Government Initiatives

    In September 2017, the Government of India asked the states to focus on strengthening single window clearance system for fast-tracking approval processes, in order to increase Japanese investments in India.

    The Ministry of Commerce and Industry, Government of India has eased the approval mechanism for foreign direct investment (FDI) proposals by doing away with the approval of Department of Revenue and mandating clearance of all proposals requiring approval within 10 weeks after the receipt of application.

    India and Japan have joined hands for infrastructure development in India's north-eastern states and are also setting up an India-Japan Coordination Forum for Development of North East to undertake strategic infrastructure projects in the northeast.

    The Government of India is in talks with stakeholders to further ease foreign direct investment (FDI) in defence under the automatic route to 51 per cent from the current 49 per cent, in order to give a boost to the Make in India initiative and to generate employment. In January 2018, 100 per cent FDI was allowed in single brand retail through automatic route along with relaxations in rules in other areas.

    The Central Board of Direct Taxes (CBDT) has exempted employee stock options (ESOPs), foreign direct investment (FDI) and court-approved transactions from the long term capital gains (LTCG) tax, under the Finance Act 2017.

    The Government of India is likely to allow 100 per cent foreign direct investment (FDI) in cash and ATM management companies, since they are not required to comply with the Private Securities Agencies Regulations Act (PSARA).

    Road ahead

    India has become the most attractive emerging market for global partners (GP) investment for the coming 12 months, as per a recent market attractiveness survey conducted by Emerging Market Private Equity Association (EMPEA).

    The World Bank has stated that private investments in India is expected to grow by 8.8 per cent in FY 2018-19 to overtake private consumption growth of 7.4 per cent, and thereby drive the growth in India's gross domestic product (GDP) in FY 2018-19.

    Sectors attracting highest FDI equity inflows:

    Amount in Rs. Crores (US$ in Million)

     

    Ranks

    Sector

    2015-16

    (April – March )

    2016-17

    (April – March )

    2017-18

    (April,17–

    December ,17)

    Cumulative

    Inflows

    (April, 00 -

    December , 17)

    % age to total Inflows (In terms of US$)

    1.

    SERVICES SECTOR **

    45,415

    (6,889)

    58,214 (8,684)

    29,819

    (4,620)

    346,387

    (64,097)

    17 %

    2.

    TELECOMMUNICATIONS

    8,637

    (1,324)

    37,435 (5,564)

    39,264

    (6,136)

    169,428

    (30,082)

    8 %

    3.

    COMPUTER SOFTWARE & HARDWARE

    38,351

    (5,904)

    24,605 (3,652)

    33,246

    (5,156)

    170,035

    (29,825)

    8 %

    4.

    CONSTRUCTION DEVELOPMENT:

    TOWNSHIPS, HOUSING, BUILT-UP

    INFRASTRUCTURE

    727

    (113)

    703

    (105)

    2,453

    (381)

    117,092

    (24,674)

    7 %

    5.

    AUTOMOBILE INDUSTRY

    16,437

    (2,527)

    10,824 (1,609)

    11,202

    (1,739)

    103,421

    (18,413)

    5 %

    6.

    TRADING

    25,244

    (3,845)

    15,721 (2,338)

    14,649

    (2,274)

    99,207

    (16,485)

    4 %

    7.

    DRUGS & PHARMACEUTICALS

    4,975

    (754)

    5,723

    (857)

    5,662

    (878)

    81,482

    (15,585)

    4 %

    8.

    CHEMICALS (OTHER THAN FERTILIZERS)

    9,664

    (1,470)

    9,397

    (1,393)

    7,327

    (1,137)

    76,279

    (14,430)

    4 %

    9.

    POWER

    5,662

    (869)

    7,473

    (1,113)

    8,912

    (1,378)

    68,999

    (12,967)

    4 %

    10

    CONSTRUCTION (INFRASTRUCTURE) ACTIVITIES

    29,842

    (4,511)

    12,478 (1,861)

    16,345

    (2,540)

    76,720

    (12,357)

    3 %

     

    Note: (i) Services sector includes Financial, Banking, Insurance, Non-Financial / Business, Outsourcing, R&D, Courier, Tech. Testing and Analysis

    (ii) Cumulative Sector- wise FDI equity inflows are at - Annex-‘B’.

    (iii) FDI Sectoral data has been revalidated / reconciled in line with the RBI, which reflects minor changes in the FDI figures (increase/decrease) as compared to the earlier published sectoral data.

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