In the first half of 2019, India is said to have received USD 27.2 billion foreign investment with the same pace sustained thereafter. The country expects that the similar pace is maintained in 2020 also with the Modi’s government liberalised norms and a significant jump in the ease of doing business ranking.
Guruprasad Mohapatra, Secretary in the Department for Promotion of Industry and Internal Trade (DPIIT) said that despite a slowdown in the global economy, inflows of foreign investment into the country have bot been impacted. According to him, the healthy growth in the overseas investments is proving that there is a lot of optimism and enthusiasm about India as a foreign investment destination. “All the ministries, departments and states are working to address issues and providing stable policies to facilitate entry of foreign companies. FDI growth has been very good this year and I am quite hopeful that with these policies and initiatives, India’s FDI story will continue unabated and continue to grow at a healthy rate. There is a need to pursue this narrative strongly in 2020,” added Mohapatra.
The secretary also mentioned that ease of doing business is very critical for FDI. “Foreign companies look into the World’s Bank ranking and they have been very impresses with India’s much-improved ranking so far. Our target is to go into the first 50th,” he added.
Mohapatra believes that improvement in the business environment gives a pleasant experience to foreign investors as it helps in making processes easier. He further stated, “Some of the states are also wooing investments. So we need to further work on the areas in which the investments are coming and see how quickly and seamlessly, we can give them approvals. These are the challenges and we are working on that.” Talking about the global companies which are looking to shift their bases from China to India, the secretary said that the government is focusing on those frims which are looking at India as a second investments destination. “We know which companies are keen to invest in India and we are looking at them to see what help we can provide in items of hand-holding and in terms of support,” he added.
Further, the DPIIT is working on two major policies such as new industrial policy and national e-commerce policy which will be announced by March 2020. “We are working on both these policies very actively. The new industrial policy is aimed at promoting emerging sectors, reducing regulatory hurdles and making India a manufacturing hub,” said Mohapatra. While, speaking of FDI in e-commerce sector, allegations were hauled against e-commerce players Amazon and Flipkart by the Confederation of All India Traders (CAIT). The traders body alleged accused these companies of following unethical practices by indulging in predatory pricing and violating FDI rules. The ministry then asked these e-commerce companies to follow the FDI rules in letter and spirit as crores of small traders are engaged in the retail sector.
In the April-June period of the current fiscal year, overseas investments increased by 28 per cent amounting to USD 16.3 billion. In 2018-19, total FDI into the country increased to USD 62 billion from USD 60.1 billion in 2017-18. Sectors that received maximum FDI includes services, computer hardware and software, construction development, trading, automobile, pharmaceuticals, chemicals, and power.