The FDI Policy of any country is the complete gamut of all mandatory laws, regulations, conditions, and processes related with foreign direct investment in that country. Besides the FDI norms, this fdi policy also essentially covers all impressive and favorable features, tax exemptions, incentives, propitious investment environments, etc., offered to the foreign investors by the Federal/Union and the State Governments of the country receiving FDI. Every feature of this FDI Policy of a country is promulgated after comprehensive and insightful analysis of the possible consequences caused by the feature in future. The main and ultimate objectives associated with the FDI Policy of a country are utilization of foreign capital and resources, increasing employment opportunities and yearly revenues, access to new technologies and business practices, new and bright horizons for industrial development and growth, and thus, promote the desired economic development and growth in the native country.
FDI Policy in India
As booming India is at present, one of the top three most impressive and lucrative destinations in the whole world, its FDI policy is certainly very sophisticated, alluring, and generous. This section exclusively deals with the fdi policy in india, to help investors of the world over. Since 1991, India has been receiving regular and quite huge foreign direct investments in its various sectors from investors located in countries worldwide. In the financial year 2013-14, India received a total of US$ 29 billion FDI in the economic sectors of computer software & hardware, automotive, telecommunications, real estate construction development, power, hospitality, and many other sectors. Now, after incorporating certain very impressive and profitable changes in its FDI norms and incentives/exemptions, which are mentioned below, India hopes to draw about US$ 60 billion in the financial year 15.
Today, economic fields covering a rather wide range are permitted in India for receiving FDI up to 74 and 100%. The majority of these fields support FDI through the automatic route (generally up to 49%), and the government route for FDI up to 100% (from 49% or 74%). As per one of the recent policy measures for fdi in india, foreign direct investment in the stock exchanges & depositories, petroleum refining by PSUs, commodity exchanges, power exchanges, courier services, etc., is now allowed through the automatic route. Other notable FDI policy measures recently taken are increment in the FDI cap in insurance and sub-activities, and also in the defense sector from 26% to 49%. In addition to these relaxations in the FDI norms, incentives (like incentives based on investment size, area-based incentives, field-based incentives, export incentives, etc.) and tax exemptions forming an array, are obtainable by foreign investors in India from the Central and State Governments.