The reforms undertaken by the Modi government in several areas have borne fruit as Foreign Direct Investment (FDI) touched a new high of $60.08 billion in 2016-17.
“The Increased FDI inflows in the country are largely attributed to intense and bold policy reforms the government undertook to bring pragmatism in the FDI regime. The country has now become the topmost attractive destination for foreign investment,” the Commerce Ministry said in a statement. The inflows grew by 8 per cent over the previous high of $55.6 billion posted in 2015-16, according to figures released by the Department of Industrial Policy and Promotion on Friday.
In the last three years since the NDA government came to power, 21 sectors covering 87 areas of FDI policy have undergone reforms. In June last year, the government had relaxed norms in single-brand retail, civil aviation, airports, pharmaceuticals, animal husbandry and food products. The Centre had allowed up to 100 per cent FDI in defence through the approval route, 100 per cent in greenfield pharma via the automatic route, 100 per cent in brownfield pharma — 74 per cent of which will be through automatic route —100 per cent in scheduled airlines and up to 49 per cent in airlines through automatic route.
“A new direction was given to FDI policy reforms in 2014 itself when conservative sectors such as rail infrastructure and defence were liberalised. This was accompanied by reforms in other sectors such as medical devices and construction development,” the release said.
The manufacturing sector has witnessed a growth of 52 per cent from $13.35 billion in financial year 2015-16 to $20.26 billion during fiscal year 2016-17. After the launch of Make In India initiative (October 2014 to March 2017), the FDI flows increased by 62 per cent to $99.72 billion as compared to $ 61.41 billion during the previous 30 months (April 2012 to September 2014).
During the Union Budget 2017-18, Finance Minister Arun Jaitley announced further liberalisation of FDI by abolishing the FIPB, a body that clears proposals envisaging foreign investment up to Rs. 5,000 crore. Jaitley recently said, "We are now at the final stages of doing away with the FIPB because 90 per cent of the investment in India comes under the automatic route.”