India offers transparent, comprehensive FDI policy framework for investments: Minister
India is offering a transparent, predictable and comprehensive FDI policy framework for investments and the 'Investment Friendliness Index of States' is set to be launched this year, the government said on Tuesday.
To promote FDI, the government has put in place an investor-friendly policy, wherein most sectors, except certain strategically important sectors, are open for 100 per cent FDI under the automatic route.
More than 90 per cent of the FDI inflow is received under the automatic route. India has embarked on a series of reforms aimed at liberalising its FDI policies, with the goal of stimulating economic growth and encouraging foreign capital inflows, informed Union Minister of State for Commerce and Industry, Jitin Prasada, in a written reply in the Lok Sabha.
In the recent past, reforms in the FDI policy have been undertaken in sectors such as defence, insurance, petroleum and natural gas, telecom and space.
FDI in the defence sector is allowed up to 74 per cent through automatic route (from earlier 49 per cent) for companies seeking new industrial licenses.
Further, 100 per cent FDI in the telecom sector is allowed under the automatic route.
The Budget also announced the further increase of FDI sectoral cap for the insurance sector from 74 per cent to 100 per cent. This enhanced limit will be available for those companies, which invest the entire premium in India.
“Further, the government always strives to attract more FDI by removing regulatory barriers, streamlining processes, developing infrastructure, bettering logistics and improving the business environment by enhancing the Ease of Doing Business (EoDB),” said Prasada.
To further strengthen a seamless business regulatory framework across the country and nudge states to promote healthy competition to attract investment including FDI, various initiatives are being undertaken.
The government released Business Reforms Action Plan (BRAP) 2024 rankings and Logistics Ease Across Different States (LEADS) 2024 report to communicate to potential investors examples of a positive business ecosystem as well as logistics performance undertaken by various States and UTs.
Further, in the Union Budget 2025. it was announced that an 'Investment Friendliness Index of States' will be launched in 2025 to further the spirit of competitive cooperative federalism, said the minister.
