Why in News ?
Overall FDI rises in FY2020 by 10 per cent. The value $42.69 billion in the year ended March 31, 2020 from $38.74 billion in the previous year.
Overall FDI
- FDI into India rose 10 per cent to $42.69 billion in the year ended March 31, 2020
- $38.74 billion in the previous year despite the global slowdown
- Cayman Islands showing the biggest jump in bringing cash in to India a 302% hike.
- Singapore, Mauritius, Netherlands, US and Japan are the major contributors to Indian FDI.
- Singapore and Mauritius remained the major source countries, accounting for about 50 per cent of total FDI flows.
- Singapore topped with FDI of $ 12.61 billion.
- FDI from the US was $ 3.40 billion.
- Implication of Hike
- Slowdown in the global economy and growing global investment concerns due to disruptions in supply chains, India was able to sustain the pace of FDI in 2019-20
- Also India was the 9th largest recipient country globally in 2019.
- Which Sector getting Highest FDI ?
- FDI equity flows went to the services sector, including communication services, retail and wholesale trade, financial services, computer and business services and the manufacturing sector.
- The manufacturing sector got $ 8.15 billion, communication services $ 6.83 billion and retail trade $ 4.91 billion.
Foreign Direct Investment
- What is FDI ?
- Foreign companies invest in Indian businesses or start their own in return they will get cheap labour with business investment in news country.
- They aren’t just bringing money with them, but also knowledge, skills and technology.
- They will invest in a country where they get cheaper workforce with skilled labour.
- What is the scenario of Indian FDI ?
- One of the major monetary source of India since 1991 Economic Liberalisation.
- Singapore emerged as the largest source of FDI in India.
- Overall FDI rises in FY2020 by 10 per cent.
- How can Investment made in India ?
- Automatic Route : The non-resident investor or the Indian company does not require any approval from Government of India for the investment.
- Agriculture & Animal Husbandry, Asset Reconstruction Companies, Auto-components, Biotechnology (Greenfield), Thermal Power, Tourism & Hospitality and White Label ATM Operations are some Automatic Routed Sectors.
- Government Route : Approval from the Government of India is required before investment considered by concerned Ministry and Department.
- Banking & Public sector, Broadcasting Content Services, Mining & Minerals separations of titanium bearing minerals and ores, Core Investment Company are some Government Routed Sectors
- Automatic Route : The non-resident investor or the Indian company does not require any approval from Government of India for the investment.
- Which sectors are prohibited from FDI ?
- There are a few industries where FDI is strictly prohibited under any route.
- Atomic Energy Generation, Any Gambling or Betting businesses, Lotteries all Kind, Investment in Chit Funds, Nidhi Company, Agricultural or Plantation Activities (although there are many exceptions like horticulture, fisheries, tea plantations, Pisciculture, animal husbandry, etc) Housing and Real Estate (except townships, commercial projects, etc) Trading in TDR’s, Cigars, Cigarettes, or any related tobacco industry.
Source : Indian Express
Topic
GS III : Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth
Current Affairs Compilation : 10 September 2020