Foreign Direct Investment and Make in India: India Relaxes Foreign Direct Investment Policy Norms to Attract Investors

Foreign Direct Investment in India has increased up to 48 percent since the Make in India initiative was launched by the Government of India in September 2014. It indicates investors confidence in the initiative that was launched with an aim to make India a manufacturing hub.

Since economic reforms of 1991, India has consistently eased the regulatory environment with regard to foreign investments to attract more investors. The opening up of the economy has resulted in rapid increase in foreign exchange reserves and foreign direct investment (FDI) in India, making it one of the fastest growing economies of the world.

India has undertaken several policy measures to relax FDI norms in various sectors such as PSU oil refineries, power exchanges, defence, medical devices, railways and many others. For instance, now onwards 100 percent FDI is allowed in medical devices andFDI up to 49 percent is allowed in Pension sector. All this has been done to ensure continuous flow of foreign capital into the country.

Sector wise FDI in India can be understood by looking at the statistics regarding the flow of the FDIduring the financial year 2014-2015 in the country. According to the Ministry of Commerce & Industry, the FDI across various sectors has been as follows:

  • Services Sector (US$ 3.2 billion)
  • Computer Software & Hardware (US$ 2.2 billion)
  • Telecommunication (US$ 2.8 billion)
  • Automobile Industry (US$ 2.5 billion)
  • Drugs & Pharmaceuticals (US$ 1.5 billion)
  • Trading (US$ 2.7 billion)
  • Construction/Infrastructure activities ( US$ 0.75 billion)

Improved foreign direct investment in India reflects the investor-friendly economic policies pursued by India have paid dividends. The amendments to the FDI policy in India have helped the country in creating a positive investment climate. India has displayed great courage to promote investment that will, hopefully, lead to increased job creation, manufacturing and an all-inclusive growth of its economy.

To know more about FDI policies in India or FDI Services, you can call at +91-8800-100-284 or Mail at

Posted by Anita Aswal - 7th November 15

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