FDI in India


Enhanced international response and powerful sectoral productivity ratios in India are incessantly drawing the attention of the global investors in India. Other aspects being characterized to the resumption in foreign direct investment (FDI) recently entail growing client assurance in the market.

India proudly features in the third slot of global direct investment destinations, despite of the recession and as per the latest report by United Nations Conference on Trade and Development (UNCTAD), it will retain its slot in the next two years.

India drew FDI influx of US$ 1.74 billion during November 2009 which is 60% more than US$ 1.08 billion procured in the previous fiscal. As per the information produced by Department of Industrial Policy and Promotion (DIPP), the collective amount of FDI influx 1991 to 2009 stood at US$ 127.46 billion

The services industry entailing fiscal and non-fiscal services drew FDI valued US$ 3.54 billion during 2009-10, while software and hardware industry acquired around US$ 595 million. In the same period the telecommunications industry obtained US$ 2.36 billion of FDI.

FDI Scenario in India


The aggregate cost of 32 domestic mergers and acquisition (M&A) agreements in India in January 2010 stood at US$ 2,167 million against 8 deals amounting to US$ 1,324 million and 28 deals amounting to US$ 223 million in 2009 and 2008, respectively.

In the fiscal year 2009, developing economies gained a massive share of 51.6% FDI, more than what the developed nations gained, as per the survey by Ernst & Young on globalization. This was chiefly because of major decline in FDI into industrial markets, that was 50% less than FDI in 2008. From 4% of 2004 to 8% of 2005, the nation's endowments in infrastructure industry doubled, as per the report by Planning Commission of India.

With the fiscal structure gaining momentum, endowment proposals in India Inc witnessed an upsurge of around 16% in 2009 to US$ 345.3, as per the report conducted by a premiere sectoral body. In 2009, nine tenders contributing total FDI of US$ 112.25 million was sanctioned by the central administration. Among the sanctioned tenders, Mitsui and Company of Japan is expected to contribute US$ 69.83 million to set-up a fully governed subsidiary in the warehousing industry.

In January 2010, the Indian government gave its consent to 14 FDI tenders which are likely to bring foreign investment amounting to US$ 157.89 million. These encompass:
  • US$ 58.82 million worth FDI tender by Asset Reconstruction Company
  • FDI valuing US$ 44.39 million by Standard Chartered Bank that is likely to elevate to 100% from 74.9% in its portfolio management arm
  • Tenders by SaharaOne, KS Oils and NDTV Imagine
  • NDTV Lifestyle tender worth US$ 54.28 million
  • Tender by India Infrastructure Development Fund based in Mauritius that is likely to bring US$ 517.29 million

FDI in India - Policy Initiatives


The Indian government has assured to release an improvised FDI policy in every six months. The offers announced by Union Finance Minister, Pranab Mukherjee, in Union Budget 2010-11, to enhance investment ambiance in India on February 26, 2010 entail:

  • Measures implemented to un-complicate the FDI system
  • System for computation of indirect foreign investment in Indian firms has been comprehensively classified.
  • Entire liberalization of costing and imbursement of technology transmit charges and trademark, and royalty expenses.

Additionally, the Indian government has permitted the Foreign Investment Promotion Board (FIPB), to sanction FDI tenders of up to US$ 358.3 million. Previously all the tenders that entailed foreign direct investment of more than US$ 129.16 million were presented in front of Cabinet Committee of Economic Affairs (CCEA) for authorization. As the Union Home Minister, Mr P Chidambaram, the exemption would accelerate foreign direct investment inflow.

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