Foreign Direct Investment (FDI) Current Affairs - 2020

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India plans to boost clean energy sector

The Government of India is planning to integrate largest lenders to the power sector in order to help clean energy firms clear their dues. It includes Rural Electrification Corporation (REC), Power Finance Corporation (PFC) and Indian Renewable Energy Development Agency (IREDA). The integration will help resolve growing crisis in the clean energy sector and also aid India achieve its ambitious targets in renewable energy.

Issue

The discoms are delaying their payments to the generators. This creates difficulties to the banking sector whose repayment is delayed. Eventually further loan processes get delayed. This creates a vicious cycle where the expansion of clean energy sector gets affected ultimately. The current issue hinders India from achieving an ambitious target of 175 GW of renewable energy by 2022.

Measures to increase Solar Energy

Recently GoI launched several steps to achieve the target of 100 GW of solar energy by December 2022. It includes waiver of Inter State Transmission System charges and losses for projects that are commissioned up to December 2022. The Union Government also permitted 100% FDI in the solar energy sector. Apart from these various schemes such as Pradhan Mantri Kisan Urja Suraksha evam Utthan Mahabhiyan Yojana (PM-KUSUM) and Solar Roof Top programme were launched.

Measures to increase Wind Energy

In 2016, the Government issued Guidelines for Development of Onshore Wind Power Projects. It included site feasibility, online registry, real time monitoring, compliance of grid regulations and decommissioning plan. In 2017, the Guidelines for tariff based competitive bidding process for wind power projects were issued. Apart from these, the government is also promoting Generation Based Incentives for wind projects.

India becomes Fourth Largest Foreign Investor into UK

As per the official figures published by the UK’s Department for International Trade, India has become the fourth largest foreign investor into the UK in 2016-17. India has lost its position as the third largest investor to France.

Salient Facts

In 2016-17, India had set up 127 new projects and safeguarded 7,645 existing jobs and created 3,999 new jobs in the UK. India is sharing the fourth spot with Australia and New Zeland, which had also set up 127 projects collectively.

The US remains the top most investor in the UK by setting up of 577 projects in 2016-17. China (including Hong Kong) with 160 projects and France with 131 projects have been placed in the second and third positions respectively.

Background

The UK continues to be a great inward investment destination and remains extremely attractive to foreign investors even after its decision to exit the EU. The UK attributes open, liberal economy, world-class talent and business-friendly taxation as a reason for remaining extremely attractive to foreign investors. The UK had managed to attract more Foreign Direct Investment (FDI) projects than ever before for 2016-17. In a sum, UK claims itself as the number one destination for inward investment in Europe with the sectors such as technology, renewable energy, life sciences and creative industries all witnessing an increase in the number of projects and investments.