India Unveils Transparent and Comprehensive FDI Policy Framework: Minister
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Synopsis
India is launching a transparent and robust FDI policy framework to attract investments. The 'Investment Friendliness Index of States' will be introduced this year to encourage competition among states, enhancing the ease of doing business.
Key Takeaways
- India's FDI policy is transparent and comprehensive.
- 100% FDI is allowed in most sectors via the automatic route.
- Recent reforms target defense, insurance, and telecom sectors.
- Investment Friendliness Index is set to launch this year.
- Government aims to improve the Ease of Doing Business.
New Delhi, Feb 11 (NationPress) India is providing a clear, reliable, and comprehensive FDI policy framework aimed at attracting investments, with the upcoming launch of the 'Investment Friendliness Index of States' this year, as announced by the government on Tuesday.
To enhance FDI, the government has established a business-friendly policy where most sectors are available for 100 per cent FDI through the automatic route, aside from a few strategically significant sectors.
Over 90 per cent of the FDI inflow comes through the automatic route. India is on a path of reforms focused on liberalizing its FDI policies to boost economic growth and draw in foreign capital, according to Union Minister of State for Commerce and Industry, Jitin Prasada, in a written statement to the Lok Sabha.
Recent reforms in the FDI policy have targeted sectors such as defense, insurance, petroleum and natural gas, telecom, and space.
In the defense sector, FDI is now permitted up to 74 per cent through the automatic route (increased from the previous 49 per cent) for companies applying for new industrial licenses.
Moreover, the telecom sector allows 100 per cent FDI through the automatic route.
The Budget also introduced an increase in the FDI sectoral cap for the insurance industry from 74 per cent to 100 per cent. This new limit applies to companies that reinvest the complete premium in India.
“Additionally, the government consistently aims to draw more FDI by eliminating regulatory obstacles, simplifying procedures, enhancing infrastructure, improving logistics, and fostering a better business climate through increased Ease of Doing Business (EoDB),” stated Prasada.
To bolster a smooth business regulatory framework nationwide and encourage states to foster healthy competition for attracting investments, including FDI, various initiatives are being rolled out.
The government has released the Business Reforms Action Plan (BRAP) 2024 rankings and Logistics Ease Across Different States (LEADS) 2024 report to showcase positive business ecosystems and logistics performance across various States and UTs to potential investors.
Furthermore, in the Union Budget 2025, it was revealed that an 'Investment Friendliness Index of States' would be launched in 2025 to promote the essence of competitive cooperative federalism, the minister added.
