According to the Commerce and Industry Ministry, since 2014, India has attracted a cumulative FDI inflow of USD of approx. 667 billion (2014-24), registering an increase of 119 per cent over the preceding decade (2004-14).
Key Highlights
- Major Source Countries: Mauritius: (25%) of total FDI inflows; Singapore (24%); USA: 10% Other Key Sources: Netherlands, Japan, UK, UAE, Germany, Cyprus & Cayman Islands
- Key Sectors Attracting FDI: Services sector (16% of total FDI inflows); Computer software and hardware (15%); Trading (7%); Telecommunications (6%).
About FDI:
- It means investment through capital instruments by a person resident outside India in an unlisted Indian company; or in ten per cent or more of the post issue paid-up equity capital on a fully diluted basis of a listed Indian company.
- It is largely non debt creating capital flow.
Significance:
- FDI allows the transfer of technology—particularly in the form of new varieties of capital inputs—that cannot be achieved through financial investments or trade in goods and services.
- Recipients of FDI often gain employee training in the course of operating the new businesses, which contributes to human capital development in the host country.
- Profits generated by FDI contribute to corporate tax revenues in the host country.
- FDI helps maintain a stable Balance of Payment and support the value of the rupee.
Govt policies boosting foreign investments in India
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