FDI Permitted in India

Foreign direct investment in India is the major source for economic development in India.  Foreign companies invest directly in in Indian businesses in order to get benefits of cheaper wages and changing business environment.

There are two routes namely automatic route and government route by which India gets FDI.  In automatic route FDI is allowed without any prior approval by the Government or Reserve Bank of India. Where as in government route prior approval by government is needed.

The application has to be created through Foreign Investment Facilitation Portal, which is able to facilitate single window clearance of FDI application below Approval Route. the applying are forwarded to the individual ministries which is able to act on the applying as per the quality procedure.[8] Foreign Investment Promotion Board (FIPB) w that was the accountable agency to administer this route was abolished on legal holiday, 2017. It control its last meeting on seventeenth Apr, that was the 245th meeting of the Board.

The major sectors for FDI are

  • Infrastructure: 10% of India’s GDP is based on construction activity.
  • Automotive: FDI in automotive sector was increased by 89% between April 2014 to February 2015.
  • Manufacturing : Electronics contributes to india’s success in manufacturing but some challenges remain with foreign direct investment.
  • Pharmaceutical: Indian pharmaceutical market is 3rd largest in terms of volume and 13th largest in terms of value.
  • Service : FDI in service sector was increased by 46% in 2014–15. Service sector includes banking, insurance, outsourcing, research & development, courier and technology testing.
  • Railways: 100% FDI is allowed under automatic route in most of areas of railway, other than the operations, like High speed train, railway electrification, passenger terminal, mass rapid transport systems etc.t
  • Chemicals: Chemical industry of India earned revenue of $155–160 billion in 2013.
  • Textile: Textile is one major contributor to India’s export. Nearly 11% of India’s total export is textile. This sector has attracted about $1647 million from April 2000 to May 2015.

Airlines: For airport modernization, 100% FDI will be allowed for existing airport under automatic route.