The Department for Promotion of Industry and Internal Trade (DPIIT) held stakeholder consultations with private equity, venture capitals and pension funds on FDI reforms to attract more investments into the country in order to meet the annual $100-billion target.

This follows a meeting held by senior DPIIT officials on FDI reforms with industry chambers and law firms last week.

FDI inflows

“The government is concerned about FDI inflows as it has not been showing robust growth recently. The meetings are a way to take stock of what all could be done to make the country a more attractive destination for foreign investors with the $100 billion annual target in mind,” a source told businessline.

There maybe be more such meetings with other stakeholders, the source added.

 “We are targeting much higher investment flows. We have about $70 billion to $80 billion which is coming in every year. But we are expecting this to increase to at least $100 billion a year in the years to come,” DPIIT Secretary Amardeep Singh Bhatia had told reporters after taking charge earlier this fiscal. 

The inflow of FDI fell to $70 billion in FY24 from $71 billion in FY23, according to a report by research body Global Trade Research Initiative (GTRI).

FDI inflows into India crossed the $ 1 trillion milestone in the April 2000-September 2024 period. The key sectors attracting the investment inflows include the services segment, computer software and hardware, telecommunications, trading, construction development, automobile, chemicals, and pharmaceuticals.

While India allows 100 per cent FDI through the automatic route in most sectors, there are caps in some sensitive sectors which have been progressively liberalised. 

In the recent past, reforms in the FDI policy have been undertaken in sectors such as defence, insurance, petroleum & natural gas and telecom. FDI in defence sector is now allowed up to 74 per cent (from earlier 49 per cent) through automatic route for companies seeking new industrial license. In insurance sector, FDI limit has been raised from 49 per cent to 74 per cent for insurance companies under the automatic route and foreign ownership and control has been allowed with safeguards. FDI up to 20 per cent in Life Insurance Corporation of India (LIC) has been permitted under automatic   route. Further, FDI up to 100 per cent under the automatic route has been permitted in telecom sector.