New Delhi: To promote FDI, the Union Government has put in place an investor-friendly policy, wherein most sectors, except certain strategically important sectors, are open for 100% FDI under the automatic route.
More than 90% of the FDI inflow is received under the automatic route. India has embarked on a series of reforms aimed at liberalizing its FDI policies, with the goal of stimulating economic growth and encouraging foreign capital inflows, Union Minister of State for Commerce and Industry Jitin Prasada informed Lok Sabha on Tuesday.
The Union Government has put in place a policy framework for Foreign Direct Investment (FDI) that is transparent, predictable, and easily comprehensible.
This framework is embodied in the Consolidated FDI Policy circular dated 15.10.2020 as amended from time to time (FDI Policy), Prasada said.
In the recent past, reforms in the FDI Policy have been undertaken in sectors such as Defence, Insurance, Petroleum & Natural Gas, Telecom and Space. FDI in the Defence sector is allowed up to 74pc through Automatic Route (from earlier 49pc) for companies seeking new industrial licenses.
Further, 100pc FDI in the Telecom Sector is allowed under the Automatic Route while FDI sectoral cap in the insurance sector has been revised from 49pc to 74pc under the automatic route, the Minister said.
The Union Budget 2025 also announced the further increase of FDI sectoral cap for the insurance sector from 74pc to 100pc. This enhanced limit will be available for those companies, which invest the entire premium in India.
Further, the Government always strives to attract more FDI by removing regulatory barriers, streamlining processes, developing infrastructure, bettering logistics and improving the business environment by enhancing the Ease of Doing Business (EoDB).
The Government, through the Jan Vishwas (Amendment of Provisions) Act, 2023, has decriminalized 183 provisions across 42 Central Acts from 19 Ministries/Departments to enhance the Ease of Living and EoDB.
The Government will also be bringing up the Jan Vishwas 2.0 bill, aiming to further improve the business environment, he said.
In the Union Budget 2025, it was announced that a High-Level Committee for Regulatory Reforms will be set up to strengthen trust-based economic governance and take transformational measures to enhance EoDB, especially in matters of inspections and compliances, he added.
