According to data released by the Department of Industrial Policy and Promotion (DIPP), India attracted $46 billion foreign direct investment (FDI) in 2016.
It shows that, India’s FDI grew by 18% in 2016 as compared to $39.32 billion FDI inflows in 2015.
- The main sectors which attracted the highest FDI inflows included services, telecom, trading, computer hardware and software and automobile.
- Bulk of the FDI came in from Singapore followed by Mauritius, Netherlands and Japan.
- Foreign investments are considered crucial for India as it needs around 1 trillion dollars for overhauling its infrastructure sector such as ports, airports and highways to boost growth.
- Strong inflow of foreign investments mainly helps to improve the country’s balance of payments (BoP) situation and also strengthen the rupee value against other global currencies, especially dominant US dollar.
- To attract inflow of foreign investments, the central government has announced several measures including liberalisation of FDI policy and improvement in business climate.
- In the Budget 2017-18, Finance Minister further announced relaxation of foreign investment norms and also abolished Foreign Investment Promotion Board (FIPB).