FDI VIA APPROVAL ROUTE SURGES 162 PER CENT TO $1.91 BILLION IN APRIL-JANUARY

Foreign Direct Investment into India through the approval route shot up 162 per cent to USD 1.91 billion in the first 10 months of the current fiscal, indicating that government’s effort to improve ease of doing business and relaxation in FDI norms may be yielding results.
During the full 2013-14 fiscal, India had received USD 1.18 billion FDI through the government approval route, according to the figures collated by the Department of Industrial Policy and Promotion (DIPP).

Although in most of the sectors foreign investment is permitted through automatic route, FDI in few sectors including pharmaceutical, defence and retail are permitted only through the approval of Foreign Investment Promotion Board (FIPB). FIPB is an inter-ministerial body under the Finance Ministry which approves foreign investments related proposals.

During the April-January period, the total foreign inflows too have increased by 36 per cent year-on-year, to USD 25.52 billion. In January, the foreign direct investment (FDI) in India more than doubled to USD 4.48 billion, the highest inflow in the last 29 months. In 2013-14, FDI stood at USD 24.29 billion compared with USD 22.42 billion a year earlier.

Healthy inflow of foreign investments into the country helped India’s balance of payments (BoP) situation and stabilised the value of rupee.
India is estimated to require around USD 1 trillion over five years overhauling its infrastructure sector, including ports, airports and highways to boost growth.

Government is taking steps to boost FDI in the country. It has relaxed FDI norms in sectors including insurance, railways and medical devices. The government has also taken a series of steps to improve ease of doing business that include having a timeline for clearance of applications, de-licensing the manufacturing of many defence products and introduction of e-Biz project for single window clearance.