FDI or Foreign Direct Investments is an investment in the form of controlled ownership in a business in another country. There are two routes by which India gets FDI. 1. Automatic route: By this route, FDI is allowed without prior approval by Government or RBI but subject to applicable laws/regulations 2. Government route: Prior approval by the government is needed via this route. Some sectors have caps on FDI investments.
Details on FDI are available in the DPIIT (Department for Promotion of Industry and Internal Trade) website (see Links) which is operated by the Commerce Department of the Government of India. To promote ‘Make in India’ the government has recently made the FDI policy more investor-friendly, under which FDI up to 100% is permitted under the automatic route in most sectors/activities. Specific projects, across sectors and states in India, mainly in the nature of infrastructure have been identified for investment opportunities by NRI and foreign entities. Details such as the project status, cost estimate, mode of funding desired and the contact person have been specified.
The FDI policy recognizes various types of investors: Non Resident Indian (NRIs)), Person of Indian Origin (PIO), Foreign Venture Capital Investor (FVCI), Foreign Institutional Investor (FII), Foreign Portfolio Investor (FPI),Qualified Financial Investor (QFI) , Overseas Corporate Bodies (OCB), Pension/Provident Fund, Financial Institutions, Foreign Trust, Sovereign Wealth Funds, Private Equity Funds, Partnership / Proprietorship Firm, Others. Each investment option provides features, benefits, and regulatory requirements. In India, the regulatory bodies are mainly the FDI policy, RBI, SEBI, FEMA and other relevant bodies based on investments.
India recently made a change to the foreign direct investment (FDI) regulations aimed at preventing the opportunistic takeover of Indian firms during the Covid-19 pandemic. Earlier, only investments from Pakistan and Bangladesh required the Indian government’s approval for security reasons. An order issued by the department for promotion of industry and internal trade (DPIIT) on April 17, without naming China, said the scope of this policy had been widened to cover all neighboring countries that share a border with India.
Refer government site for FDI policy details and updates https://dipp.gov.in/policies-rules-and-acts/policies/foreign-direct-investment-policy
