{"id":9635,"date":"2022-05-21T00:00:00","date_gmt":"2022-05-21T00:00:00","guid":{"rendered":"https:\/\/www.nextias.com\/current_affairs\/uncategorized\/21-05-2022\/the-foreign-direct-investment-fdi\/"},"modified":"2025-08-01T17:55:13","modified_gmt":"2025-08-01T12:25:13","slug":"the-foreign-direct-investment-fdi","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/21-05-2022\/the-foreign-direct-investment-fdi","title":{"rendered":"The Foreign Direct Investment [FDI]"},"content":{"rendered":"\n<p><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong><u>In News<\/u><\/strong><\/span><\/span><\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\">Recently, the centre said that India has reported highest FDI inflow worth $83 billion in 2021-2022.<\/span><\/span><\/span><\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong><u>About the recent trend in FDI&nbsp;<\/u><\/strong><\/span><\/span><\/span><\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh4.googleusercontent.com\/3qW1i-IeiJYWDlcPxDApCGwdr-mOngkHd-AAj5NYIREClxMwkRuHZA7Q0G1g_3uNqNywXRnbojr-smSddyiHVFc8GWb3IsILda7L_YPEvwgJmoUmkbVptMoynILtlaDf0vqxn8F7Hy07KJizsQ\" alt=\"\"\/><\/figure>\n\n\n\n<p class=\"has-text-align-center\"><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong><\/strong><\/span><\/span><\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>In the Financial Year 2021-22<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"> it touched a highest ever figure of $83.57 billion.<\/span><\/span><\/span>\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\">FDI increased by around 22% post-Covid from 2020 to 2022 at $171.84 billion, in comparison to the inflows of $141.10 billion reported pre-Covid from 2018 to 2020.<\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>Sector that received highest FDI<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\">: Computer software and hardware emerged as the top recipient sector of FDI equity inflows with an around 25% share, followed by the services and automobile sectors, both at 12%.<\/span><\/span><\/span>\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\">FDI equity inflows in manufacturing rose 76% in FY22.<\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>State specific data:<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"> The major recipient States of FDI equity inflows were Karnataka 53%, Delhi 17%, and Maharashtra 17%.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>Country specific data<\/strong>: Singapore was the topmost investor in India accounting for 27% of the <a href=\"https:\/\/www.nextias.com\/ca\/current-affairs\/24-07-2025\/drop-in-net-foreign-direct-investment\">FDI<\/a>, followed by the US at 18% and Mauritius at 16%.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>Significance: India is rapidly emerging as a preferred country for foreign investments<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"> in the manufacturing sector.<\/span><\/span><\/span>\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>The country&#8217;s foreign investment inflows increased 20-fold<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"> since the financial year 2003-04 when it recorded mere $4.3 billion.<\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong><u>Forign Direct Investment<\/u><\/strong><\/span><\/span><\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\">It refers to the conditions when a <\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>company or investor takes ownership and controls operation<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"> in a<\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong> business entity in another country<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\">.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\">With FDI,<\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong> foreign companies<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"> are <\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>directly involved<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"> with day-to-day operations in the other country which implies that along with bringing <\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>money<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\">, they <\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>also bring knowledge, skills and technology<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\">.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\">It is an important <\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>non-debt monetary source<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"> for India\u2019s economic development.<\/span><\/span><\/span>\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>Economic liberalisation <\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\">started in India in the wake of the <\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>1991 crisis<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"> and since then, <\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>FDI has steadily increased<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"> in the country.<\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>FDI Routes<\/strong><\/span><\/span><\/span>\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>Government Route: <\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\">For investment in business sectors requiring prior approval from the Foreign Investment Promotion Board (FIPB).<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>Automatic Route: <\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\">For investment in business sectors that do not require prior approval from the government.<\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>Categories<\/strong><\/span><\/span><\/span>\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>Horizontal:<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"> It refers to the investor establishing the same type of business operation in a foreign country as it operates in its home country.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>Vertical:<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"> It is the one in which different but related business activities from the investor\u2019s main business are established or acquired in a foreign country, such as when a manufacturing company acquires an interest in a foreign company that supplies parts or raw materials required for the manufacturing company.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>Conglomerate:<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"> It is one where a company or individual makes foreign investment in a business that is unrelated to its existing business in its home country.\u00a0<\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<div>\n<table cellspacing=\"0\" style=\"border-collapse:collapse; border:none; table-layout:fixed; width:624px\">\n<tbody>\n<tr>\n<td style=\"background-color:#fff2cc; border-bottom:1px solid #000000; border-left:1px solid #000000; border-right:1px solid #000000; border-top:1px solid #000000; vertical-align:top\">\n<p><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong><u>What Is the Difference Between FDI and FPI?<\/u><\/strong><\/span><\/span><\/span><\/p>\n<ul>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>Foreign portfolio investment (FPI)<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"> is the addition of international assets to the portfolio of a company, an institutional investor such as a pension fund, or an individual investor. It is a form of portfolio diversification, achieved by purchasing the stocks or bonds of a foreign company.<\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>Foreign direct investment (FDI) requires a substantial investment<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"> in, or the outright acquisition of, a company based in another country.<\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>FDI is generally a larger commitment<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\">, made to enhance the growth of a company.<\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>Both FPI and FDI are generally welcome, particularly in emerging nations<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\">. Notably, FDI involves a greater responsibility to meet the regulations of the country that hosts the company receiving the investment.<\/span><\/span><\/span><\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n\n\n\n<p><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong><u>Advantages of FDI<\/u><\/strong><\/span><\/span><\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>Increase in Economic growth<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\">: One of the benefits of FDI is the creation of jobs. A developing nation is always on the lookout to attract heavy foreign investments as it leads to an overall improvement in the way an economy functions.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>Development of human capital<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\">: Every entity intending to grow its business through foreign investments invests a part of its capital in developing the required human resource.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>Technology:<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"> Foreign companies derive enormous benefits from FDI through improved technology and tools. Newer and improved operational practices are adopted to make the vision a reality.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>Rise in exports<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\">: The FDI usually does produce goods keeping the global markets in mind, and therefore the goods produced by them are export compatible. This leads to an increase in exports, and it is achieved by creating 100% export-oriented units.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>Facilitates the stability in the exchange rate<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\">: If the economy successfully maintains a constant flow of foreign capital through FDI, it simply translates into a flow of regular foreign exchange in the country. This flow will help build a growing foreign exchange reserve, ultimately stabilising the exchange rates, which the Central Bank maintains.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>FDI leads to the creation of a Competitive Market<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\">: it facilitates the entry of foreign entities into the local marketplace. This move helps to build and sustain a healthy competitive environment.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>Helps in combating climate change<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\">: Due to the mounting issues surrounding climate change, the United Nations has encouraged the route of foreign direct investments, realising that it will help fight the problems.<\/span><\/span><\/span><\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong><u>Disadvantages of FDI<\/u><\/strong><\/span><\/span><\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>Not suitable for strategically important industries<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\">: Countries should not allow foreign ownership of companies in strategically important industries. That could lower the comparative advantage of the nation.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>Investors have less moral attachment<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\">: Foreign investors might strip the business of its value without adding any. They could sell unprofitable portions of the company to local, less sophisticated investors.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>Unethical access to local markets<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\">: They can use the company&#8217;s collateral to get low-cost, local loans. Instead of reinvesting it, they lend the funds back to the parent company.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>Hindrance of domestic investment:<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"> Sometimes FDI can hinder domestic investment. Because of FDI, countries\u2019 local companies start losing interest to invest in their domestic products.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>The risk from political changes<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\">: Other countries\u2019 political movements can be changed constantly which could hamper the investors.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>Poor performance:<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"> Multinationals have been criticised for poor working conditions in foreign factories.<\/span><\/span><\/span><\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong><u>Government Initiatives to Boost FDI<\/u><\/strong><\/span><\/span><\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\">The <\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>Government of India aims to achieve USD 100 billion <\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\">worth of FDI inflows in the following two years, making India the top recipient of Greenfield FDI Inflows in the world.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\">Proposal to commence the <\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>auctioning of 5G spectrum<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\">.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>National E-Commerce Policy <\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\">(draft) to encourage FDI in the marketplace model of e-commerce to ensure a level playing field for all participants.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>Revised FDI rules<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"> to e-commerce allowing 100 per cent FDI in the marketplace-based model of e-commerce.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\">Launch of <\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>National Digital Communications Policy, 2018<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"> with a target of increasing FDI inflows in the telecommunications sector to USD 100 billion by 2022.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>Removal of the need for government approval for FDI<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"> up to an extent of 100 per cent in Real Estate Broking Services.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>Strengthening the single-window clearance system <\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\">for fast-tracking approval processes for Japanese investors in India.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>Doing away with the approval of the Department of Revenue<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"> and<\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong> mandating clearance<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"> of all proposals requiring approval within 10 weeks after the receipt of application.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\">The Government introduced a <\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>Production Linked Incentive (PLI) scheme<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"> for the various sectors that gives large impetus to the FDI inflow.<\/span><\/span><\/span><\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong><u>Way forward<\/u><\/strong><\/span><\/span><\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>Government has put in place a liberal and transparent policy for FDI<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\">, wherein most of the sectors are open to FDI under the automatic route.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong>The government had undertaken reforms in sectors<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"> such as coal mining, contract manufacturing, digital media, single brand retail trading, civil aviation, defence, insurance and telecom.<\/span><\/span><\/span><\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><strong><u>Source:<\/u><\/strong><\/span><\/span><\/span><a href=\"https:\/\/www.thehindu.com\/business\/fdi-inflow-highest-ever-at-8357-billion\/article65440168.ece\" style=\"text-decoration:none\" target=\"_blank\" rel=\"noopener\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#1155cc\"><strong><u>TH<\/u><\/strong><\/span><\/span><\/span><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In News About the recent trend in FDI&nbsp; Forign Direct Investment What Is the Difference Between FDI and FPI? Foreign portfolio investment (FPI) is the addition of international assets to the portfolio of a company, an institutional investor such as a pension fund, or an individual investor. It is a form of portfolio diversification, achieved [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[26,46],"class_list":["post-9635","post","type-post","status-publish","format-standard","hentry","category-current-affairs","tag-gs-3","tag-indian-economy-related-issues"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/9635","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=9635"}],"version-history":[{"count":1,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/9635\/revisions"}],"predecessor-version":[{"id":50063,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/9635\/revisions\/50063"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=9635"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=9635"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=9635"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}