For Quick Alerts
ALLOW NOTIFICATIONS  
For Daily Alerts

PM Gati Shakti Plan Single Window Clearance To Further Push FDI Inflows In New Year

By
|

A series of steps taken by the government to promote ease of doing business and liberalisation of foreign direct investment norms have helped India receive record FDI inflows so far this year, and implementation of measures like PM Gati Shakti, single window clearance and GIS-mapped land bank are expected to further push investments in 2022.

 
PM Gati Shakti Plan Single Window Clearance To Further Push FDI Inflows

Notwithstanding the global slowdown and the COVID-19 pandemic, total foreign direct investments into India rose to a record USD 81.72 billion in 2020-21. During April-July this fiscal, FDI (foreign direct investment) into the country increased by 62 per cent to USD 27.37 billion. "Increasing FDI is a reflection of global trust in India's growth story.

 

World wants reliable partners. India is providing all those parameters of growth which the investors would like to see before investment. "Further steps like rolling out of PM Gati Shakti National Master Plan (NMP), single window clearance and GIS (Geographic Information System) mapped land bank would help in attracting further investments," Secretary in the Department for Promotion of Industry and Internal Trade (DPIIT) Anurag Jain told PTI.

The government is making all-round efforts to improve ease of doing business, he said, adding that the compliance burden has been reduced in more than 25,000 compliances over the last few years. "Structural reforms and a series of measures to promote ease of doing business, start up programmes and liberalisation of FDI policy are bringing in transformational changes in the industrial landscape.

Efforts of the Centre to support the startup ecosystem has also created a buzz about India in the business and investment sector of the world," Jain said. He added that so far 19 central government ministries/departments and 10 states have boarded the national single window system, which has been soft launched as a single point of clearance for investor related issues, as of now.

Similarly, the India Industrial Land Bank is GIS enabled and has mapped over five lakh hectares of land, over 4,500 industrial parks, and shows vacant industrial plots available for investors, he added. Among several areas, the government has relaxed FDI norms in coal mining, defence production, contract manufacturing, and single-brand retail trading.

Foreign direct investment equity inflows into India have touched USD 548 billion between April 2000 to June 2021, which is further strengthening the country's credentials as an investment destination. About 28 per cent of the FDI came through the Mauritius route.

It was followed by Singapore (22 per cent), the US (8 per cent), the Netherlands, and Japan (each 7 per cent) and the UK (6 per cent). The other big investors have been from Germany, Cyprus, France and Cayman Islands. Since 2015-16, total FDI inflows, which comprise equity inflows, reinvested earnings and other capital, have been recording significant growth.

In that fiscal, the country received FDI worth USD 55.55 billion, an increase of 35 per cent over the previous year. FDI stood at USD 60.22 billion, USD 60.97 billion, USD 62 billion and USD 74.4 billion in 2016-17, 2017-18, 2018-19 and 2019-20, respectively.

The key sectors which attracted the maximum FDI include services segment, computer software and hardware, telecommunications, trading, construction development, automobile, chemicals, and pharmaceuticals. Although FDI is allowed through the automatic route in most of the sectors, in certain areas such as telecom, media, pharmaceuticals and insurance, government approval is required for foreign investors.

Under this route, a foreign investor has to take prior approval of the respective ministry or department whereas for the automatic route, an overseas investor is only required to inform the Reserve Bank of India (RBI) after an investment is made. At present, FDI is prohibited in as many as nine sectors. They are lottery business, gambling and betting, chit funds, 'nidhi' companies (a type of NBFC), real estate business, and manufacturing of cigars, cheroots, cigarillos and cigarettes using tobacco.

The government had made prior approval mandatory for foreign investments from countries that share land border with India to curb "opportunistic takeovers" of domestic firms following the COVID-19 pandemic, a move which was aimed at restricting FDI from China.

According to experts, the high growth story of FDI into the country would continue in 2022 as well. S Anjani Kumar, Partner, Deloitte India, said international business leaders remain confident of India's short- and long-term prospects and are readying plans to make additional and first-time investments in the country. "FDI is one of the key levers that will help achieve India's USD 5 trillion GDP goal.

While foreign investment inflows into India have been consistently rising over the past five years, to achieve this GDP goal, a more proportionate contribution to gross capital formation (new greenfield assets) and the increase in exports can be achieved through greater FDI in manufacturing," Kumar said.

According to a Deloitte survey 'India's FDI Opportunity', the country scored highly for its skilled workforce and prospects for economic growth, and it has the strongest positive perception in the US when compared to markets such as China, Brazil, Mexico, and Vietnam.

Nischal Arora, Partner - Regulatory, Nangia Andersen LLP, said, "We expect the FDI to grow at a healthy growth rate of 10-15 per cent on the backdrop of PLI (production linked incentive) schemes being introduced and operationalised during 2021-22 in over 12 manufacturing sectors requiring substantial capital investments which may be funded through, among other source, FDI".

(PTI)

Story first published: Tuesday, December 21, 2021, 12:07 [IST]
Company Search
Get Instant News Updates
Enable
x
Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X