Chandigarh, December 13, 2024 (Punjab Khabarnama Bureau) – In the 2019-20 budget, Finance Minister Nirmala Sitharaman had set the target of making India a 5 trillion dollar economy in the next five years, which some people had questioned. However, now this dream seems to be getting closer to reality. Since April 2000, foreign direct investment (FDI) in India has reached 1 trillion dollars, which is a historic achievement.
Impact of increase in FDI
This achievement has been underpinned by a jump of nearly 26% in FDI during the first half of 2023. FDI has reached $42.1 billion in the current fiscal year. This growth is positioning India as a prominent global investment destination driven by proactive policy framework, dynamic business environment and rising international competitiveness.
Benefits to India from FDI
FDI has played a vital role in India’s development. It not only provides non-debt financial resources but also promotes technology transfer and generates employment opportunities. Initiatives such as “Make in India”, “liberal sectoral policies”, and “GST” have boosted investor confidence. In addition, competitive labor costs and strategic incentives have attracted multinational companies to invest in India.
Status of FDI in the past
The total FDI inflow from April 2014 to September 2024 was $709.84 billion which is 68.69% of the total FDI in the last 24 years. This strong investment further strengthens India’s global economic role.
Other benefits of FDI
– Competition and innovation :
India has strengthened its position in the Global Competitiveness Index 2024 by moving up three places from 43rd to 40th. India has also secured 81st position in the Global Innovation Index 2023, which reflects a significant improvement from India’s position in 2015. This ranking shows the country’s innovation ecosystem and its progress in improving its competitive edge.
– Global Investment Status
India emerged as the third-largest recipient of greenfield projects with 1,008 project announcements. In addition, the number of international project finance deals in India increased by 64%, making it the second-largest recipient. These figures show India’s growing global prominence.
– Improvement in the business environment
India has made significant progress in improving its business environment. India rose from 142nd place in 2014 in the World Bank’s Doing Business Report to 63rd place in 2020. This improvement resulted from simplifying regulations, reducing bureaucratic hurdles and creating a more business-friendly environment for investors.
– Improvement in policies
The government has formulated an investor-friendly policy to encourage FDI. Now most sectors are open for 100% FDI under the automatic route except for a few strategically important sectors. Along with this, with the aim of simplifying tax compliance for startups and foreign investors, the Income Tax Act 1961 has been amended in 2024 by abolishing angel tax and reducing the income tax rate on the income of foreign companies.
Let us tell you that this historic growth of FDI in India reflects the country’s growing economic strength and attraction for global investment. This investment is not only strengthening the Indian economy but is also giving the country a prominent place on the global stage.