Foreign Direct Investment (FDI) occurs when a corporation acquires control of a company or Business in another country. Foreign companies are directly involved with other companies and bring money, knowledge, skills, and tools. FDI in India started when economic liberalization got into demand, which was around 1991.
FDI is a booster for the Indian economy and has been proved as a monetary source. It is a massive contributor to the economic growth of India. India has gradually made its place in international markets and is a crucial investment destination with promising returns. Numerous factors influence foreign investors or companies to invest in Indian businesses or corporations. Some are like low wage rate, skilled human resources, an abundance of natural resources, and liberal policies. India has also improved its status in the global club of Ease of Doing Business and tops the Greenfield FDI ranking. FDI in India has generated more than 10 million jobs, which is quite a number.
The Indian government has been enacting foreign policy regulations to make the FDI mechanism more liberal and simplified to attract more foreign investment in India's various sectors. Prime Minister Narendra Modi moved mountains to promote India on different international platforms and implement significant reforms in the Indian business climate. In 2014, the government raised the foreign investment ceiling in the insurance sector from 26% to 49%. In September 2014, it also introduced the Make in India initiative, under which the FDI policy was further liberalized for 25 sectors. After the launch of the "Make in India" initiative in April 2015, FDI inflow into India has increased by 48 percent. Under the automatic path, the government increased FDI in defense manufacturing from 49 percent to 74 percent in May 2020. In April 2020, the government amended its new consolidated FDI policy to bar foreign companies from making opportunistic takeovers or acquisitions of Indian companies. The Indian government released an order on April 18, 2020, shielding Indian companies from FDI during the pandemic. Before any FDIs, all countries sharing a land border with India will be scrutinized by the Ministry of Commerce and Industry. The Consolidated FDI Regulation, which was published on October 28, 2020, incorporated these changes.
FDI in India has been one of the good things for people. One should contribute to it to make it a significant success and learn from it to benefit the country and citizens.