Industries Sectors Attracting Maximum Foreign Investments In India

industries sectors attracting maximum foreign investments in india

INDUSTRIES / SECTORS ATTRACTING MAXIMUM FOREIGN INVESTMENTS IN INDIA

Industries sectors attracting maximum foreign investments in India- Foreign direct investment (FDI) plays a critical role in the economy of any nation, India opens the doors to the whole world in 1991 to get the FDI and till then, India is becoming the most favourite county to invest. Countries invest in India in order to take advantage of lower wages, incentives by the government in taxes, for a country where the FDI being brought by the Company gains through employment opportunities, and technical know-how.

Govt. of India has taken a number of measures in order to keep the flow of the FDI into India, as discussed various amendment in the FDI policy is done to ensure that the FDI keep coming into India. Specifically speaking, sectors like defence, PSU, telecom and stock exchanges are some of the sectors where the government has taken charge.

Market size

If we see the data as shared by the Department for Promotion of Industry and Internal Trade (“DPIIT”) an amount of US$ 456.79 billion from April 2000 to December 2019 has been received which shows that efforts made by our government in way to ease of doing business in India and relaxing the norms related to Foreign investment in India.

Service sector of India received around US$ 36.79 billion from April-December 2019. Data for the period 2019-20 shows that it is the service sector in India where the most highest FDI is being made which is US$ 6.52 billion, this is followed by by computer software & hardware where the FDI inflow stood at US$ 6.34 billion, the telecommunications sector where FDI is made around US$ 4.29 billion, and trading Sector at US$ 3.52 billion. Talking about Countries, In 2019-20, Singapore made a total investment of US$ 11.65 billion, this is followed by the countries Mauritius that made investment of US$ 7.45 billion, Netherlands that made investment of (US$ 3.53 billion), Japan that made investment of (US$ 2.80 billion) and also USA that made investment of (US$ 2.79 billion).

Announcement

Here is the list of some of the significant FDI announcements made :

  • In January 2020, Amazon India announced an investment of US$ 1 billion for digitizing small & medium sector businesses and creating 1 million jobs by the year 2025.
  • Again In the month of January 2020, Mastercard announced its plans to invest up to US$ 1 billion, the next 5 years to boost its research & development actions in the Indian market.
  • In the month October 2019, French oil and gas giant Total S.A. acquired a 37.4 percent stake in M/s Adani Gas Ltd amounting to Rs 5,662 crore, making it the largest FDI in India’s city gas distribution sector.
  • In the month August, 2019, Reliance Industries announced one of India’s biggest FDI deals, as Saudi Aramco to buy a 20% stake in the business Reliance’s oil-to-chemicals (OTC).
  • In the month of October 2018, VMware, a leading software innovating enterprise of the US, has announced an investment of US$ 2 billion in India between by 2023.
  • In August 2018, Bharti Airtel received the approval of the Government of India for sale of a 20 percent stake in its DTH business to an America based firm, namely Warburg Pincus, amounting to $350 million.
  • In the month of June 2018, Idea’s appeal for 100 % FDI was approved by the DoT followed by its merger with Vodafone making M/s Vodafone Idea one of the largest telecom operator in our country.
  • In the month May 2018, Walmart acquired a 77 % stake in M/s Flipkart for a consideration of US$ 16 billion.
  • Latest, Facebook acquired a stake in Reliance amounting to 9.9%. This is followed by Vista’s buying stake in Reliance.

Government Initiatives

  • In March 2020, the government permitted non-resident Indians (NRIs) to acquire up to 100 percent stake in Air India.
  • In December 2019, the government permitted 26 percent FDI in digital sectors.
  • In August 2019, the government permitted 100 % FDI under the automatic route (where no approval from required) in coal mining
  • In Union Budget 2019-20 also, the Govt. of India proposed the opening of FDI in the aviation sector, media (animation, AVGC), and insurance sectors in consultation with all stakeholders.
  • 100 percent FDI is allowed for insurance intermediaries business.
  • As of February 2019, the Govt. of India is creating a road map for the achievement of its own goal of US$ 100 billion FDI inflows.
  • In the month of February 2019, the Govt. of India released the Policy Draft on National E-Commerce, which boosts FDI in the marketplace of the e-commerce business. Further, it provides that the FDI policy for the e-commerce sector has been developed to ensure a level playing field for all participants.
  • The government of India is planning to consider 100 % FDI in Insurance intermediaries business to give a boost to this sector and attracting more FDI.
  • In the month December 2018, the Govt. of India revised FDI rules related to the e-commerce sector. As per the rules, 100 % FDI is permitted in the marketplace based model of the e-commerce sector.
  • Further, sales of the vendor(s) through any e-commerce portal or its group companies have been limited to 25 % of the total sales of such vendors.
  • In the month of January 2018, the Government of India allowed foreign airlines to invest in Air India up to 49 percent with government approval. The investment cannot exceed 49 percent directly or indirectly.
  • The government allowed FDI up to the extent of 100 % in Real Estate Broking Services.
  • The Govt. of India is also in consultation with all stakeholders to further liberalise the ease foreign direct investment (FDI) in defense under the automatic route up to 51 % from the current 49 percent, with respect to boost the campaign to the “Make in India” initiative.

Road ahead

Well, as India becomes one of the most attractive markets globally for the purpose of investment, it is as per the survey as conducted by EMPEA or Emerging Market Private Equity Association.

It is expected that FDI will rise upto US$ 75 billion in the coming 5 years it is mentioned in the report as shared by UBS., Our government has a target to reach 100 Billion worth of FDI in the coming 2 years. Here are the flows of FDI Country-wise as well as Industry-wise

fdi country-wise as well as industry-wise

 

fdi industry-wise

Click here for – Foreign direct investment from neighbouring countries

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