India received highest ever FDI inflow of over Rs 6 lakh crore in FY22

New Delhi: India received its highest ever Foreign Direct Investment (FDI) inflow of Rs 6,31,050 crore in Financial Year 2021-22 said Som Parkash, Minister of State in the Ministry of Commerce and Industry. The FDI Equity inflow in manufacturing sectors has increased to Rs 1,58,332 crore in the financial year 2021-22 from Rs 89,766 crore in the previous year, making it an increase of 76 per cent.

Foreign direct investment (FDI) is a type of investment wherein an investor from one country establishes or significantly influences a business entity in another economy.

The increase in FDI inflows is a result of the measures taken by the Government on FDI policy reforms, stated the official statement. A transparent and liberal policy was adopted in order to attract Foreign Direct Investment. Strategically important sectors are open for 100 per cent FDI under the automatic route.

Foreign investment in the manufacturing sector is under the automatic route. Manufacturing activities may be self-manufacturing by the investee or contract manufacturing in India with a legal basis. This is subject to the provisions of the FDI Policy. 

A manufacturer can also sell its products through wholesale or retail, including through e-commerce, without obtaining government approval.

Measures undertaken by the Reserve Bank of India (RBI) to enhance foreign exchange inflows include exemption of incremental Foreign Currency Non-Resident (Bank) and Non-Resident (External) Rupee deposits from Cash Reserve Ratio and Statutory Liquidity Ratio and allowing of Foreign Portfolio Investment in commercial paper and non-convertible debentures with an original maturity of up to one year, amongst others.