7 January , 2020 Fdiindia
India Hopes to Maintain FDI Growth in 2020
Under the re-elected Modi government, India is optimistic to maintain its growth in foreign direct investment equity inflows into the New Year 2020 and hopes to continue being one of the most attractive destinations in the world for foreign investments backed by liberalized FDI norms that were introduced in 2019.
As per Guruprasad Mohapatra, secretary in the Department for the Promotion of Industry and Internal Trade (DPIIT), despite a worldwide economic slowdown, equity inflows of foreign investments into India have not been impacted.
India received foreign investments amounting to USD 27.2 billion in the first half of 2019 and the pace of growth has been stable since then.
Mohapatra said that the healthy growth in foreign investments is proof that there is a lot of enthusiasm and optimism about India as an attractive destination for overseas investments.
He further said that the centre with various departments and ministries are working on addressing issues and formulating stable policies in order to facilitate more investments from abroad.
"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," Mohapatra told PTI.
"Ease of doing business is very critical for FDI. Foreign companies look into the World Bank's ranking and they have been very impressed with India's much-improved ranking so far. Our target is to go into the first 50th," he said.
The secretary also said that the improvement in business environment leads to a pleasant experience for foreign investors as it aides in making processes easier.
"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," he added.
On being asked about global companies that are looking at shifting their bases from China to India, he said the government is also focusing on firms that are interested in making India its second investment 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 terms of hand-holding, and in terms of support," Mohapatra said.
The DPIIT is holding meetings to discuss and create further reforms that liberalize FDI norms in the coming months in areas like AVGC (animation, visual effects, gaming and comics), and insurance.
"The government will continue with the FDI relaxations in more sectors," Rajat Wahi, Partner, Deloitte India, said.
In 2019, Finance Minister Nirmala Sitharaman had proposed several reforms in FDI norms across various sectors that were then later sanctioned by the government. These changes were in sectors including single brand retail trade, contract manufacturing, digital media, and coal mining.
These changes were suggested after India witnessed a drop in foreign direct investment equity inflows for the first time in 6 years. The new reforms were aimed at attracting more overseas investors to invest in the country.