India’s Ministry of Commerce and Industry reported on Wednesday that total foreign direct investment (FDI) inflow to India fell 15% to $74.01 billion in calendar year 2021, down from $87.55 billion the previous year.
FDI inflows comprise equity inflows, unincorporated body equity capital, reinvested earnings, and other capital.
“FDI inflow is generally a result of commercial business decisions, and it is influenced by a variety of factors including natural resource availability, market size, infrastructure, political and general investment climate, macroeconomic stability, and foreign investor investment decisions. In comparison to calendar year 2020, FDI inflows declined by 15% in calendar year 2021 “Som Parkash, India’s Minister of State for Commerce and Industry, said in a written reply to the Lok Sabha.
To encourage FDI, the government has implemented an investor-friendly policy under which most industries, with the exception of a few strategically vital areas, are open to 100% FDI via the automatic method. Furthermore, the FDI policy is evaluated on a regular basis to ensure that India remains a desirable and investor-friendly location.
“Changes to the policy are made after talks with stakeholders such as apex industry chambers, associations, industry/group representatives, and other organisations. The administration has lately implemented a lot of reforms in a variety of areas. Reforms to the FDI policy have recently been implemented in industries like insurance, petroleum and natural gas, and telecommunications “, added the minister.