Foreign Investment Current Affairs - 2019
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According to Census on Foreign Liabilities and Assets of Indian Direct Investment Companies 2016-17 released by Reserve Bank of India (RBI), Mauritius was largest source of foreign investment (FDI) in India.
The census yields carry comprehensive information on market value of foreign liabilities and assets of Indian companies arising on account of FDI, ODI and other investments.
Mauritius was largest source of FDI in India (21.8% share at market value) followed by USA, UK, Singapore and Japan. Singapore (19.7%) was major ODI destination, followed by Netherlands, Mauritius, and US.
18,667 companies had participated in census, of them 17,020 had FDI/overseas direct investment (ODI) in their balance sheets in March 2017. 96% of responding companies were unlisted in March 2017 and most of them had received only inward FDI.
Unlisted companies had higher share of FDI equity capital vis-a-vis listed companies. Further, over 80% of 15,169 companies that reported inward FDI were subsidiaries of foreign companies (single foreign investor holding over 50% of total equity).
The manufacturing sector accounted for nearly half of total FDI at market prices, information and communication services (ICTS) and financial and insurance activities were other major sectors that attracted FDI. Total sales, including exports, of foreign subsidiaries in India increased by 18.7% during 2016-17 whereas their purchases, including imports, increased by 20.1%.
The Union Cabinet has given its approval for raising foreign shareholding limit from current 5% to 15% in Indian Stock Exchanges.
The decision brings the investment limit of foreign entities at par with that of domestic institutions.
This enhanced limit is for a stock exchange, depository, banking company, insurance company and commodity derivative exchange.
Additionally, the Union Cabinet also gave its approval for foreign portfolio investors to acquire shares through initial allotment, besides secondary market, in the stock exchanges.
- Enhance global competitiveness of Indian stock exchanges.
- Enable Indian stock exchanges to acquire and adopt latest technology and global best practices.
- Pave way for better overall growth and development of the Indian capital market
- The Union Cabinet approval is in pursuance of implementation of the 2016-17 Budget Announcement made by the Union Finance Minister Arun Jaitley.
- Finance Minister had made this announcement with regard to reforms in FDI Policy in order to enhance investment limit for foreign entities in Indian stock exchanges from 5% to 15%.