The government relaxes the FDI policy and takes steps to improve ease of doing business, whereby the FDI in the country has grown by 77.5 percent to $5.28 billion in September, 2016
According the accounts of the Department of Industrial Policy & Promotion (DIPP), In September 2015, the FDI had stood at USD 2.9 billion. During the period April-September 2016, the FDI in the country had increased by 30 percent to USD 21.62 billion while comparing to USD 16.63 billion in the same period 2015. The sectors such as banking, insurance, outsourcing, Research & Development, courier & technology testing, had attracted FDI valued USD 1.46 billion during April-September 2015, as per the record of DIPP.
Amid the ten top sectors, services received the highest FDI of USD 2.29 billion during the first half of 2016, followed by telecommunications ($2.78 billion), trading ($1.48 billion), computer software & hardware ($1.03 billion) and automobile ($729 million).
However, the government has taken significant steps to improve ease of doing business in the country so as to attract domestic and foreign investments. With increase in FDI in service sector, overall foreign inflows in the country went up by 30 percent to USD 21.62 billion during the first half of 2016-17. The key service sector contributes over 60 percent to India’s GDP. In the year 2015-16, foreign investment in services had grown to $6.89 billion from $4.44 billion in 2014-15.
The other sectors where the inflow growth recorded during the period April-Sept. 2016-17 are telecom, trading, automobile, computer hardware & software, for $2.78 billion, $1.48 billion, $729 million, $1.03 billion, respectively. Additionally, the government is looking forward at more ideas to enhance services exports, for which it is organizing global services exhibition to materialize the aim. Moreover, the commerce ministry has worked out a scheme to relax norms in the sector, including higher education to catch foreign players.
The government relaxed FDI norms in different sectors, that include defense and civil aviation to enhance FDI growth in the country. Foreign investments are treated as vital for India, which needs around USD 1 trillion for refurbishing its infrastructure sectors like ports, airports and highways to increase the growth. However, a strong foreign investments inflow will facilitate to pick up the country’s balance of payments (BoP) status and make stronger the value of rupee against other global currencies, specially the USD.