Foreign Direct Investment Policy of India
Investment climate in India has improved considerably since the opening up of the economy in 1991.
This is primarily attributed to ease in FDI rules in India. India, today is a part of the top 100 clubs on Ease of Doing Business (EoDB). FDI inflows in India stood at $45.15 Bn in 2014-15 and have consistently increased since then.
Total FDI inflows in the country in the last 23 years (Apr 2000 to Dec 2023) are $971.521 Bn while the total FDI inflows received in the last 9 years (Apr 2014 to Dec 2023) was $448.896 Bn which amounts to nearly 67% of total FDI inflow in last 23 years.
In FY 2014-15, FDI inflow in India stood at mere $45.15 Bn, which increased to $60.22 Bn in 2016-17 and further to the highest ever annual FDI inflow of $83.57 Bn reported during the FY 2021-22.
Total FDI inflows in the country in the FY 2023-24 is $17.96 Bn and total FDI equity inflows stands at $11.54 Bn.
Mauritius (26%), Singapore (23%), USA (9%), Netherland (7%) and Japan (6%) emerge as top 5 countries for FDI equity inflows into India FY 2023-24.
Top 5 sectors receiving highest FDI Equity Inflow during FY 2023-24 are Services Sector (Finance, Banking, Insurance, Non Fin/ Business, Outsourcing, R&D, Courier, Tech. Testing and Analysis, Other) (16%), Computer Software & Hardware (15%), Trading (6%), Telecommunications (6%) and Automobile Industry (5%).
Top 5 States receiving highest FDI Equity Inflow during FY 2023-24 are Maharashtra (30%), Karnataka (22%), Gujarat (17%), Delhi (13%), and Tamil Nadu (5%).
*Foreign technology collaboration in any form including licensing for franchise, trademark, brand name, or management contract is also prohibited for Lottery Business and Gambling and Betting activities
**Real estate business shall not include the development of townships, construction of residential/ commercial premises, roads or bridges and Real Estate Investment Trusts (REITs) registered and regulated under the SEBI (REITs) Regulations, 2014
Filing of Application
Proposal for foreign investment, along with supporting documents to be filed online, on the Foreign Investment Facilitation Portal, at the following url: www.fifp.gov.in/
Documents for Form FC-GPR (Foreign Currency – Gross Provisional Return) SMF
- CS Certificate
- Declaration by the Authorised Representative of the Indian Company/LLP
- Pre and post shareholding pattern in the Indian company
- Copy of government approval (if applicable)
- Copy of the order of the High Court on the scheme of merger/ demerger/ amalgamation (if applicable)
- RBI approval on the amount of refund with respect to the amount of the issue (if applicable)
- Valuation certificate
- Approval letter (if non-compliant with the guidelines – if applicable)
- Relevant RBI approvals for an issue of equity shares against funds payable to the foreign investor
- FIRC/ Debit statement
- Know Your Customer (KYC)
- Board Resolution
Note:
As per the RBI notification on “Foreign Investment in India – Reporting in Single Master Form” of 7th June 2018, now provides for all the extant reporting structures of various types of foreign investments in India are now provided under a Single Master Form (SMF) which is required to be filed online.
As per the RBI Notification ARF and FC-GPR is merged into a single revised FC-GPR (SMF). All new filings for the Form FC-GPR (SMF) have to be done in Single Master Form only.