In the financial year 2021-22, India received its highest ever Foreign Direct Investment (FDI) inflow of Rs 6,31,050 crore, said Som Prakash, Minister of State in the Ministry of Commerce and Industry.
In manufacturing sectors, the FDI Equity inflow has increased to Rs 1,58,332, in the financial year 2021-22 from 89,766 crores in the earlier year, making it an increase of 76%
A corporate entity in another economy is developed by or strongly affected by a foreign investor. Foreign direct investment is the term for this type of investment (FDI).
The official announcement claims that the government’s changes to its FDI policy are what caused the surge in FDI inflows. A liberal and open policy was implemented to attract foreign direct investment. All FDI is accepted in sectors that are critical from a strategic standpoint under the automatic approach.
The manufacturing sector automatically accepts foreign investment. The investee has the option of carrying out manufacturing tasks themselves or using licensed manufacturers in India. This is subject to the FDI Policy’s limitations.
To increase foreign exchange inflows, the Reserve Bank of India (RBI) has taken several measures, such as allowing foreign portfolio investment in commercial paper and non-convertible debentures with original maturities of up to one year and exempting incremental foreign currency non-resident (bank) and non-resident (external) rupee deposits from the Cash Reserve Ratio and Statutory Liquidity Ratio.
