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Sectors in india

State In India


The Country’s Number One State in Marine Exports.

Andhra Pradesh, famously known as “the rice bowl of India”, is dominated by the agriculture and livestock sector. The state is strategically located near Chennai and has easy connectivity to major cities and is one of the favoured...  read more
  • Textile and Apparel
  • Infrastructure and Urban Development
  • Agriculture
  • Power and Energy
  • IT and Electronics
  • Automobiles and Auto Components
  • Aerospace and Defence


The World’s Largest Tea Producing Region.

Situated in northeast India, Assam is the highest producer of onshore natural gas in the country. The state produces more than half of India’s tea. The state is rich in water resources and has vast tracts of fertile land. Assam is also the...  read more
  • Power
  • Textile, Handloom and Handicraft
  • Tourism and Hospitality
  • Agri-Horticulture and Food Processing
  • Information Technology
  • Pharma and Medical
  • Plastic and Petrochemicals
  • River Transport and Port Township


 Delhi is Home to The Headquarters of Various Key Government Ministries and Departments.

FDI in Delhi States The national capital of India, Delhi is one of the largest metropolises in the country. Delhi has an attractive real estate market and is a preferred tourist destination. Owing to its location, connectivity, and rich cultural...  read more
  • Tourism and Hospitality
  • Construction and Real Estate
  • IT and ITES
  • Agri and Food Processing


Global Leader in Processed Diamonds.

With a staggering coastline of 1,600 km, Gujarat is one of the leading industrialised states in India. One of the fastest growing economies in the world, Gujarat ranked #3 in National Council of Applied Economic Research’s State...  read more
  • Food Processing
  • Automobile and Auto Components
  • Chemicals
  • Pharmaceutical and Biotechnology
  • Textiles and Garments-
  • Gems and Jewellery
  • IT and Business Process Management
  • Tourism and Hospitality


Largest Software Exporter.

Karnataka is India’s largest software exporter, second largest chip design hub, fourth largest automobile producer and fourth largest contributor to electronic industrial output. It is also a leader in exports of readymade garments, gems and...  read more
  • Textile
  • Heavy Engineering and Machine Tools
  • Automobile and Auto Components
  • Information Technology
  • Agri and Food Processing
  • Biotechnology
  • Electronic System Design and Manufacturing
  • Aerospace and Defence


Home to The World's Largest Film Industry: Bollywood

Maharashtra lies on the western coast of India. It is the third largest state in the country, occupying approximately 9.4% of the total geographical area. The state is well connected to all the major markets with 3 international airports, over...  read more
  • Textile
  • Tourism
  • Food Processing
  • Gems and Jewellery
  • Automobile and Auto-Components
  • Electronic System Design and Manufacturing
  • Information Technology
  • Biotechnology and Pharmaceutical


Sole Producer of Diamonds in India.

Popularly known as the ‘heart of India’ because of its central location, Madhya Pradesh is a state blessed with vast natural resources, a rich cultural heritage, an excellent industrial base coupled with an investor-friendly government....  read more
  • Agriculture and Food Processing
  • Automobile and Engineering
  • Textile
  • Tourism
  • Renewable Energy
  • Pharmaceuticals
  • Defence
  • IT/ITES and EDSM


Highest Solar Energy Potential in India. 

Rajasthan, the largest (area-wise) state in India, is located in the north-western part of the subcontinent. The state has an agricultural economy with nine agro-climatic zones and various types of soil that enhance the cultivation of crops. It is...  read more
  • Automotive
  • IT and ITES
  • Electronic Systems Design and Manufacturing
  • Tourism
  • Textile and Garments
  • Agro and Food Processing
  • Minerals and Ceramics
  • Energy


Highest Contributor to India's Renewable Energy Capacity.

Tamil Nadu, the land of Kanjivaram sarees, houses the country's largest spinning industry. The urbanized state has the second largest coastline – 1,076 km – in India and an excellent road and rail network. Tamil Nadu has a diversified...  read more
  • Aerospace
  • Food Processing
  • Textile and Garments
  • Automobiles
  • Information Technology
  • Pharmaceutical
  • Tourism
  • Renewable Energy


The State Accounts for 21% of The Country's Total Production.

Uttar Pradesh is the most populous state in India, with a large pool of skilled, semi-skilled and unskilled labour. Alternately, its population is also looked upon as the largest consumer base in the country with around 200 million people. It is the...  read more
  • Biotechnology
  • Auto-Components
  • Food Processing
  • IT and ESDM
  • Chemicals and Petrochemicals
  • Cement
  • Tourism
  • Leather
FDI equity inflows into India cross $500 billion milestone
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FDI equity inflows into India cross $500 billion milestone

FDI India Media Coverages
Latest Updates

FDI India Media Coverages

PM Modi's Keynote Address at US-India Strategic Partnership Forum
Latest Updates

PM Modi's Keynote Address at US-India Strategic Partnership Forum

Policy Watch - 100?I by NRIs in Air India
Latest Updates

Policy Watch - 100?I by NRIs in Air India

PM Modi: 'India Fulfilling Its Demands Through Make In India - FDI India
Latest Updates

PM Modi: 'India Fulfilling Its Demands Through Make In India - FDI India

Soft Loan

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Soft Loan refers to a loan given on the alignment term in contrast with other loans. Conditions can be the low-interest rate, prolong repayment period etc. The repayment of the loan may consist of interest holiday. The process of extending the loan is known as soft financing or concessional funding. These types are generally not provided by private banks. Soft loans are given by multinational development banks which are affiliated by the world banks to the developing countries.

Soft loans are given to support the developing countries for enhancing political and economic relations. This only happens when the lender is interested in the borrowing nation or not. These types of loans are offered with next-to-no or no interest rate with a grace period. There are many developing and underdeveloped nations which require funds but they are unable to borrow on a given market rate. In this case, soft loans are given to maintain the ties between the two countries. For example, China is actively financing Africa in the last decade. Soft Loans are generally given by the government to the project which is interested in.

There are few benefits of Soft loans, it can be a win-win situation for some countries:

  • Good Opportunity for a business: Soft Loan acts as a platform for the lenders to maintain comprehensive diplomacy with the borrower and offer business opportunities. It plays a vital role in receiving considerable tax breaks on import and export.
  • Easy Funding for underdeveloped countries: Many counties cannot afford to borrow money on the market rate. Soft loans make it easier for poorer countries to expand their business and become financially stable.
  • Establishing Relationship: Soft loans play a vital role in establishing relationships between the two countries economically and politically.
  • Economic Collaboration: Nations involved in soft loan benefits each other which plays a significant role in enhancing economic collaborations.

The Reserve Bank of India has permitted India based organizations to borrow money from the foreign stakeholders consisting of funding for general purpose as well. To get a loan, organizations are required to follow some guidelines and apply to RBI to get the loan. After that, RBI conducts an evaluation which can go for a long time before giving any final verdict. As per the Foreign Direct Investment scheme, an investment can be considered in the form of share and debentures.

  • Automatic Route: Foreign investor or Indian entity does not need any approval from the RBI.
  • Government Route: The foreign investor or Indian entity should have government approval.

Soft loans are given below market rate at the rate of 3.25 P.A on floating business rates with the extended grace period. These loans are provided by the multinational banks which are affiliated with the World Bank or the federal government to developing and underdeveloped countries.

The Moratorium period of a soft loan is one-and-a-half years. A moratorium period refers to the time when the borrower is not required to pay any repayment. Soft loans are given at lower interest rates. The repayment period starts after the loan is paid out every month.

  • The business of chit funds
  • Nidhi Company
  • Agricultural or Plantation activities
  • Real Estate Business
  • Trading in Transferable Development Rights

Ease of doing business with FDI in India

About FDI India

FDI has a huge share and a key motivator of growth in the Indian economy. India opened up to foreign direct investments in the year 1991 and since then the foreign investments have been pouring in the country immensely.

The government of India has been making regulations in the foreign policies in order to make the FDI process liberal and more streamlined in-order to attract more foreign investments in various sectors of India. Prime Minister Narendra Modi does not leave any stone unturned in order to promote India in various global platforms and also bring major reforms in the business environment of India.

The factors that attract foreign investors to India are the low wage rate, skilled human resources, an abundance of natural resources, and liberal policies. India has gradually made its place in the international market and as a key investment destination that provides promising returns. The position of India has also improved in the global club of Ease of Doing Business and tops the Greenfield FDI ranking.

FDI India Entry Routes

The government of India has established two routes through which foreign investors can make investments into the Indian economy. The routes for FDI are the automatic route and the government route. A thorough understanding of the two routes is required in terms of foreign investments as the government has divided the various sectors amongst them.

Government Route : As the name suggests, the route for foreign investments that has government involvement is known as the government route. To make foreign investments in the sectors that come under the government route, the foreign investors are required to first take approvals from the government as without approvals the foreign entities would not be able to make the investments in India. The foreign investors have to submit a proposal to the respective administrative ministry department who is responsible for granting permissions and then the investments can be made. 

Automatic Route : The sectors that come under the automatic route of FDI do not require any approvals from the government. The foreign investors can make the investments without taking any approvals from the government through the automatic route but the revised policies must be checked before making the investments to avoid any confusion. 

Market Size

One of the major factors that make India an attractive destination for foreign direct investments is the market size as India has a huge customer base that the foreign investors want to make the best use of. The buying capacity of the consumers is huge and India provides a good market for foreign goods.

Due to the high return on investments, foreign investors want to invest in Indian companies and also launch their products. The government of India plays its role rightfully in enhancing the number of foreign investments coming into the country by making time to time reforms in the FDI policy that increase the ease of doing business in the country.

According to the World Bank data, India is currently in the 63 rd position in the Ease of Doing Business Rankings and this is a very positive thing for the country and for its aim of attracting a high volume of foreign investments into the country.

It is due to the government reforms being made in the business environment of India that the country has not reached the top 100 countries to be featured on the Ease of Doing Business Rankings but has attained the 63 rd position also. 
According to the Department of Promotion of Industry and Internal Trade, the FDI equity inflow in India is at the US $469.99 billion during April 2000 and March 2020, which clearly indicates that the hard work of the government of India has paid off by improving the ease of doing business in India and also making relaxations in the FDI norms. 
The FDI equity inflow in India is at the US $ 49.97 billion in 2019-20. The highest FDI equity inflow has been attracted by the service sector of US$ 7.85 billion. 
In 2019-20, India received the maximum FDI equity inflow from Singapore of US $14.67 billion, Mauritius of the US $8.24 billion, Netherlands of US 6.50 billion, USA of US $ 4.22 billion and Japan (the US $3.22 billion).

Investments and Developments

India has gained its position in being one of the top 10 countries that have received the highest foreign direct investments in the world. According to the recent UN report, India had attracted $49 billion inflows in 2019. There is a 16% increase in foreign investments that reflects a good position of FDI India.

The following are the recent developments that have taken place in foreign direct investments in India.

  • Between April 23 and July 16, 2020, Jio Platforms Ltd. sold 25.24 per cent stake worth Rs 1.52 trillion (US$ 21.57 billion) to various global investors from separate deals involving Facebook, Silver Lake, Vista, General Atlantic, Mubadala, Abu Dhabi Investment Authority (ADIA), TPG Capital, L. Catterton, Public Investment Fund (PIF), Intel Capital, Qualcomm Ventures and Google. This is the largest continuous fundraise by any company in the world.

  • In May 2020, Philips, Dutch health tech and consumer electronics company, announced its plan to invest Rs 250-300 crore (US$ 35.47-42.56 million) to boost its manufacturing and R&D facilities in India.

  • In January 2020, Amazon India announced an investment of US$ 1 billion for digitising small and medium businesses and creating one million jobs by 2025.

  • In January 2020, Mastercard announced its plans to invest up to US$ 1 billion in India over the next five years to double its research and development effort in the Indian market.

  • In October 2019, French oil and gas giant, Total S.A., acquired 37.4 per cent stake in Adani Gas Ltd for Rs 5,662 crore (US$ 810 million), making it the largest FDI in India’s city gas distribution (CGD) sector.

  • In August 2019, Reliance Industries (RIL) announced one of India's biggest FDI deals with Saudi Aramco to buy a 20 per cent stake in Reliance's oil-to-chemicals (OTC) business at an enterprise value of US$ 75 billion.

The following are the government developments concerning FDI in India. In May 2020, Government increased FDI in Defence manufacturing under the automatic route from 49 per cent to 74 per cent.
In April 2020, the Government amended existing consolidated FDI policy for restricting opportunistic takeovers or acquisition of Indian companies from neighbouring nations.
In March 2020, Government permitted non-resident Indians (NRIs) to acquire up to 100 per cent stake in Air India.

Initiatives by the Government

The following are the recent measures that have been taken by the government of India in terms of foreign direct investment. According to the survey done by the Emerging Market Private Equity Associatio (EMPEA), India will be the most attractive emerging market for global partners (GP) investment.

The main aim of government initiatives taken for FDI in India is to bring ease of doing business and for the promotion of foreign investments in various sectors of the economy. In recent months, the government has given the allowance of 100% FDI in various sectors and is in talks for giving 100% FDI in more sectors.

The Indian government aims to achieve the goal of US $100 billion worth of FDI in just two years. India has been attracting major foreign investments even when the world economy is not in good condition due to COVID 19 pandemic.

The following are the recent government initiatives taken for foreign direct investments in India.

  • In May 2020, the Government increased FDI in defence manufacturing under the automatic route from 49 per cent to 74 per cent.

  • In April 2020, the Government amended existing consolidated FDI policy for restricting opportunistic takeovers or acquisition of Indian companies from neighbouring nations.

  • In March 2020, Government permitted non-resident Indians (NRIs) to acquire up to 100 per cent stake in Air India.

  • In December 2019, the Government permitted 26 per cent FDI in digital sectors.

  • In August 2019, Government permitted 100 per cent FDI under the automatic route in coal mining for open sale (as well as in developing allied infrastructure like washeries).

  • In Union Budget 2019-20, the Government of India proposed opening FDI in aviation, media (animation, AVGC) and insurance sectors in consultation with all stakeholders.

  • 100 per cent FDI is permitted in insurance intermediaries.

  • As of February 2019, the Government of India has been working on a road map to achieve its goal of US$ 100 billion worth of FDI inflow.

  • In February 2019, the Government of India released the Draft National E-Commerce Policy to encourage FDI in the marketplace model of E-commerce. Further, it stated that the FDI policy for the E-commerce sector was developed to ensure a level playing field for all participants.

Types and Methods of FDI

Types of FDI

To further understand the nuances of FDI in India, let us have a look at the types of foreign direct investments.

1. Horizontal FDI

  • In this type of FDI the parent company initiatives the same business model in another country.
  • The goods and services that are manufactured abroad are mostly similar to the products/services that are manufactured in the home country of the company.
  • The term horizontal is given to this type of FDI because the similar operations of a company are carried out in another country

2. Vertical FDI

  • This type of FDI is known as the export platform foreign direct investment in which the exports are sent back to the home market.
  • The main contributor to this type of FDI is the increase of the trade blocks that have low internal trade barriers but have higher external barriers.

3. Platform FDI

  • In the case of platform FDI, a business gets expanded to another country but the aim of this expansion is to take the output from the foreign country and export it to the third country.

Methods of FDI

Foreign investors have the opportunity of expanding their business into other countries through the means of foreign direct investment. The following are the various methods of foreign direct investment:

  • Mergers and acquisitions
  • Joint Ventures with foreign companies
  • Starting subsidiary in an abroad country of the domestic company
  • Getting voting stocks in a foreign company