India received over $306 bn in FDI since 2000: Govt

29 January 2014

The country has received total foreign investment of $306.88 billion since 2000, 94 per cent of which has been received during last 9 years, according to the government.

The government attributed this to the progressive liberalisation of the country's FDI policy, which helped to make the investment regime more investor friendly.

India has been consistently rated amongst the top three investment destinations globally by all international bodies, including the World Bank and the UNCTAD. This is also mirrored in the foreign investment data.

According to an official release, between 1999 and 2004, India received $19.52 billion of foreign investment, which increased to $114.55 billion between 2004-09, and increased further to $172.82 billion between 2009 and September 2013.

The government approved liberalisation of FDI norms in a number of sectors, including 100 per cent in telecom and higher caps in insurance and defence sectors. FDI in multi-brand retail has been allowed up to 51 per cent, where the minimum foreign investment requirement is $100 million, at least 50 per cent of which should be invested in 'backend infrastructure' within three years of the induction of FDI.

The FDI limit in single brand retail has been enhanced to 100 per cent.

While the FDI cap in defence sector remains unchanged at 26 per cent, it has been decided that higher limits of foreign investments in 'state-of-the-art' technology manufacturing would be considered by the Cabinet Committee on Security.

Recently, the government also amended the sectoral caps or entry routes in some sectors, viz, petroleum and natural gas, commodity and stock exchanges, power exchanges, depositories and clearing corporations, asset reconstruction companies, credit information companies, tea sector including tea plantations, single brand product retail trading, test marketing, telecom services, courier services and defence.

The review of FDI policy is done with a view to boost investor confidence thereby stimulating FDI inflows and contributing to accelerated economic growth.

FDI inflows have a positive impact by supplementing domestic capital, technology and skills of existing companies, including in the aviation sector, as well as through establishment of new companies.

It has indirect multiplier effect on other related sectors also, and thereby stimulates economic growth. FDI inflows also have a positive impact on the current account balance.

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