Sakshi Education
By Srirangam Sriram, Sriram's IAS, New Delhi.
India adopted policies to promote FDI in various sectors through the Production linked incentive scheme that applies to the foreign firms too. Other structural reforms undertaken by India were: GIS mapping of available land banks, issuance of Quality Control Orders to reduce unfair imports. FDI limits were raised in the defence sector.
At the same time, India prohibited opportunistic investments. In April 2020, India changed its foreign direct investment (FDI) policy to curb "'opportunistic takeovers/acquisitions' of Indian companies due to the current pandemic" according to the Department for Promotion of Industry and Internal Trade. With the fall in global share prices, there was concern that China could take advantage of the situation, leading to takeovers. New FDI policy ensures that all FDI from countries that share a land border with India will now be under scrutiny of the Ministry of Commerce and Industry.
India’s atma nirbhar strategy seeks FDI so that it helps Indian economy and domestic consumption and exports as well.
The success of the reforms launched by the Government is evident in the numbers. Even during the pandemic, India received over USD 20 billion of FDI till September while the global FDI declined.
Other reforms like labour, agriculture, corporate tax and ease of doing also helped in bringing in record FDI.
However, the need of the hour remains the augmentation of infrastructure, trade facilitation so that trade and transaction costs, crucial for FDI firms, are decreased.
Redesigning SEZs and EPZs policy for better performance is prudent.
At the same time, India prohibited opportunistic investments. In April 2020, India changed its foreign direct investment (FDI) policy to curb "'opportunistic takeovers/acquisitions' of Indian companies due to the current pandemic" according to the Department for Promotion of Industry and Internal Trade. With the fall in global share prices, there was concern that China could take advantage of the situation, leading to takeovers. New FDI policy ensures that all FDI from countries that share a land border with India will now be under scrutiny of the Ministry of Commerce and Industry.
India’s atma nirbhar strategy seeks FDI so that it helps Indian economy and domestic consumption and exports as well.
The success of the reforms launched by the Government is evident in the numbers. Even during the pandemic, India received over USD 20 billion of FDI till September while the global FDI declined.
Other reforms like labour, agriculture, corporate tax and ease of doing also helped in bringing in record FDI.
However, the need of the hour remains the augmentation of infrastructure, trade facilitation so that trade and transaction costs, crucial for FDI firms, are decreased.
Redesigning SEZs and EPZs policy for better performance is prudent.Published date : 15 Dec 2020 12:42PM