Government of India Programmes for Attracting Foreign Direct Investment (FDI) in India: India Business Entry
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India has implemented several government programs and initiatives to attract foreign direct investment (FDI) into the country. The Government of India through its initiative has made endeavours on ease of doing business in India and is aiming to create a business environment which is more conducive to setting-up business in India by foreign individuals and foreign Corporations and is more friendly for exports from India. FDI plays a crucial role in boosting economic growth, creating job opportunities, promoting technological advancements, and enhancing the overall development of the country. The initiative further includes giving specific tax benefits and tax exemptions in different sectors, tweaking of the corporate laws or the business laws and updating them as per the present situation while laying down more emphasis on setting-up of assembly lines in India and setting-up of manufacturing units in India respectively.
The Indian government has recognized the significance of FDI and has taken various measures to encourage and facilitate foreign investments. In this article, we will explore some of the specific government programs and initiatives introduced by the Government of India to attract FDI.
1. Make in India: Launched in September 2014, the Make in India campaign is one of the flagship programs of the Indian government aimed at transforming India into a global manufacturing hub. The program focuses on attracting foreign companies to set up manufacturing facilities in India by simplifying regulatory processes, easing business norms, and providing a favorable investment climate. Make in India promotes 25 key sectors, including automobiles, textiles, chemicals, pharmaceuticals, and electronics, among others, offering various incentives such as tax exemptions, intellectual property protection, and infrastructure development.
2. Start-up India: Launched in January 2016, Start-up India is an initiative that aims to foster a conducive environment for start-ups in India and promote entrepreneurship. The program offers several benefits and incentives to both domestic and foreign start-ups, including tax breaks, fast-track patent examination, and funding support through various government schemes. The government has also established a fund of funds with a corpus of INR 10,000 crores (approximately USD 1.5 billion) to support start-ups and attract investment from domestic and foreign venture capital firms.
3. Digital India: Digital India is a flagship program launched in July 2015 with the objective of transforming India into a digitally empowered society. The program aims to improve digital infrastructure, enhance digital literacy, and provide digital services to citizens. By promoting the digitization of various sectors such as e-governance, digital payments, and cybersecurity, Digital India creates an attractive ecosystem for foreign investors, particularly in the technology and digital sectors.
4. Smart Cities Mission: The Smart Cities Mission, launched in June 2015, aims to develop 100 smart cities across India. These cities are envisioned as sustainable and technologically advanced urban centers that provide a high quality of life to their residents. The program offers significant investment opportunities for foreign companies in sectors such as infrastructure development, transportation, housing, and utilities. The government has allocated substantial funds and introduced various incentives, including faster approval processes and tax benefits, to attract foreign investors in the development of smart cities.
5. National Infrastructure Pipeline (NIP): The National Infrastructure Pipeline is an ambitious program launched in December 2019 that aims to invest INR 111 lakh crore (approximately USD 1.5 trillion) in infrastructure projects over the next five years. The program focuses on sectors such as roads, railways, airports, ports, energy, and urban infrastructure. Foreign investors are encouraged to participate through various modes, including public-private partnerships (PPPs) and the hybrid annuity model (HAM). The government has taken measures to streamline approval processes, provide viability gap funding, and ensure the ease of doing business for foreign investors in infrastructure projects.
6. Invest India: Invest India is the national investment promotion and facilitation agency of India. It serves as a one-stop-shop for foreign investors, providing comprehensive support and facilitation services. Invest India assists investors in navigating the regulatory environment, identifying investment opportunities, and connecting with relevant government authorities and business networks. The agency plays a crucial role in promoting and marketing India as an attractive investment destination.
7. Foreign Direct Investment Policy: The Indian government has continuously revised its FDI policy to liberalize and simplify investment regulations. The policy allows for automatic approval of FDI in most sectors, eliminating the need for prior government approval.
Thus, it can be easily seen that the Government of India is leaving no stone unturned to ensure exponential increase in FDI inflows in India.
Authored By: Adv Anant Sharma
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