To further streamline FDI settlement mechanism: Secretary DPIIT – Industry News

The government continues to streamline the approval process for foreign direct investment (FDI) applications in restricted sectors so that they are approved in the shortest possible time while aiming to achieve inflows of $100 billion per year, a senior official said on Wednesday.

“FDI in most sectors is on the automatic route and only a few sectors are still in the restricted category. We will continue to streamline the processes so that any proposals that do not require restrictions are cleared within the shortest possible time after all necessary consultations,” said Amardeep Singh Bhatia, secretary, Department of Promotion of Industry and Internal Trade (DPIIT). “Continuous efforts are being made to liberalise FDI,” said Himani Pande, additional secretary, DPIIT.

Total FDI in India — including equity and reinvested earnings — was around $70 billion in 2023-24. It peaked in 2021-22 at $84.8 billion. “We expect it to grow to at least $100 billion in the coming years,” Bhatia said at a press conference on 10 Years of Make in India.

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Foreign direct capital inflows to the manufacturing sector over the last decade (2014–2024) reached $165.1 billion, an increase of 69% compared to the previous decade (2004–2014), when the inflows amounted to $97.7 billion.

One of the successful initiatives under Make in India is the Production Linked Incentive (PLI) scheme launched in 2020 with an allocation of Rs 1.97 trillion.

As of end-June 2024, 755 applications have been approved across 14 sectors. Companies selected under PLI have invested a total of Rs 1.32 trillion, resulting in direct employment generation for 8.5 lakh people.

The largest investment of Rs 30,370 crore was recorded in photovoltaic modules, followed by pharmaceuticals with Rs 29,482 crore and automotive and auto components with Rs 17,896 crore.

A less talked about sector under the PLI, specialty steel, has seen investments of Rs 15,872 crore. Investment in food products stands at Rs 8,837 crore, electronics at Rs 8,390 crore and textile products at Rs 5,167 crore till the end of June.

Thanks to Make in India initiatives, exports have increased rapidly. An additional Rs 4 trillion in exports have been generated through PLI schemes. Total employment in the manufacturing sector has increased to 6.4 crore in 2022-23 from 5.7 crore in 2017-18.

Bhatia also said there was no plan to expand PLI schemes beyond the existing 14 sectors. The budget, however, mentioned extending PLI to leather and footwear and toys.

The Economic Survey 2023-24 presented to Parliament in July had suggested leveraging foreign direct investment from China to plug into global supply chains and boost exports by easing conditions on investments from countries sharing land borders with India.

Asked whether the government is considering easing the terms and conditions for foreign direct investment from countries bordering the mainland, the secretary said, “the investment policy was laid down in Press Note No. 3 issued in April 2020. We are continuing with that policy. There is a change in that policy for now.”