GS IAS Logo

< Previous | Contents | Next >

9.12. Reforms in FDI

The World Bank has improved India's ranking to 130th in the 2017 Study of Ease of Doing Business. Data released by DIPP shows that FDI inflows into India in 2016 jumped 18% to a record $46.4 billion, at a time global FDI inflows fell

IMF has branded India as the brightest spot in the Global Economy whereas the World Bank projects India's growth at 7.6% for FY 2018


Automatic Route: Under this route no Central Government permission is required.


Government Route: Under this route applications, are considered by the Foreign Investment Promotion Board (FIPB). Approval from Cabinet Committee on Security is required for more than 49% FDI in defence. The proposals involving investments of more than INR 30 billion are considered by Cabinet committee on economic affairs.

The essence of these reforms is to ease, rationalise and simplify the process of foreign investments in the country and to put more and

more FDI proposals on automatic route instead of Government route so as to make the processes more efficient living upto ideals of minimum government and maximum governance. This is also in continuation of the liberalisation reforms started in 1991.

Further refining of foreign investments in sectors such as Construction, manufacturing sector for wholesale, retail and e-commerce strengthening programmes like Make in India, Start up India, food processing and Digital India.

The government has proposed in the budget about abolition of Foreign Investment Promotion Board for further liberalising FDI policy

The measures taken by the Government are

 

directed to open new sectors for foreign direct investment, increase the sectoral limit of existing sectors and simplifying other conditions of the FDI policy. ♤ Foreign Investment in Defence Sector up to 100%:o Impact on Indian economy and its defence sector ♤ Civil Aviation Sector ♤ Other sectors:Current Affairs’ TV Channels, Down-linking of TV Channels