Lok Sabha Question No. 3494 (UNSTARRED), answered on 2023-03-22
Subject: FDI Policy
Ministry: COMMERCE AND INDUSTRY
Asked by: Gyaneshwar Patil, Nayab Singh

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY DEPARTMENT FOR PROMOTION OF INDUSTRY AND INTERNAL TRADE

## LOK SABHA

## UNSTARRED QUESTION NO. 3494.

TO BE ANSWERED ON WEDNESDAY, THE 22 ND  MARCH, 2023.

## FDI POLICY

## 3494.  SHRI GYANESHWAR PATIL: SHRI NAYAB SINGH:

Will the Minister of COMMERCE AND INDUSTRY be pleased to state: वाणिज्य एवं उद्योग मंत्री

- (a) the  salient  features  of  the  new  FDI  policy  implemented  by  the  Government which is likely to encourage the Foreign investment in India;
- (b) the details of sectors wherein the FDI has been increased for investment under the said new policy; and
- (c) the sectors in which maximum foreign investment has been made during the last three years and the new opportunities created due to the said investment across the country?

## ANSWER

## वाणिज्य एवं उद्योग मंत्रालय में राज्य मंत्री ( श्री सोम प्रकाश ) THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE & INDUSTRY (SHRI SOM PARKASH)

- (a): To promote foreign investment, the Government has put in place an investor   friendly policy, wherein most sectors, except certain strategically important sectors,  are open for  100%  FDI  under  the  automatic  route.  Further,  the  policy  on  FDI  is reviewed on  an  ongoing  basis,  to  ensure  that  India  remains  an  attractive  and  investor friendly destination. To simplify the approval process of foreign Investment and  to promote  ease  of  doing  business,  the  erstwhile  Foreign  Investment          Promotion Board (FIPB) has been abolished in May 2017 and a new regime   has been put in place.  Under  the  new  regime,  process  for  granting  FDI  approvals      has  been simplified wherein the work relating to processing of applications for FDI          has  been delegated  to  the  concerned  Ministries/  Departments  and  DPIIT  is  the          nodal department for facilitating the process. Detailed standard operating   procedure for approval  process  has  been  issued  by  DPIIT.  Further,  all  proposals  seeking Government approval under FDI route are now filed on National Single    Window System (NSWS) Portal.
- (b): FDI  policy  provisions  have  been  progressively  liberalized  and  simplified          across various sectors in the last eight years, such as Pension, Other Financial Services, Asset  reconstruction  Companies,  Broadcasting,  Pharmaceuticals,  Single  Brand Retail  Trading,  Construction  &  Development,  Power  Exchanges,  e- commerce activities, Coal Mining, Contract  Manufacturing, Civil Aviation etc. In the recent past,

reforms  in  the  FDI  Policy  have  been  undertaken  in  sectors  such  as  Defence, Insurance, Petroleum & Natural Gas and Telecom. FDI in defence sector is now allowed  up  to  74%  (from  earlier  49%)  through  automatic  route for  companies seeking new industrial license. In insurance sector, FDI limit has been raised from 49%  to  74%  for  insurance  companies  under  the  automatic  route  and  foreign ownership and control has been allowed with safeguards. FDI up to 20% in Life Insurance Corporation of India (LIC) has been permitted under  automatic    route. Further, FDI up to 100% under the automatic route has been permitted in Telecom sector. Details of Sectors wherein in FDI has increased in past 8 years, as  compared to preceding 8 years is placed at Annexure.

- (c): Details of top 10 sectors that comprise more than 75% of FDI Equity inflow (excluding reinvested earnings, other capital and equity in incorporated bodies) received in the country during the last three financial years (from April 2019 to March 2022) are as under:

| STATEMENT ON TOP SECTOR-WISE FDI EQUITY INFLOW FROM April 2019 TO March 2022   | STATEMENT ON TOP SECTOR-WISE FDI EQUITY INFLOW FROM April 2019 TO March 2022                                              | STATEMENT ON TOP SECTOR-WISE FDI EQUITY INFLOW FROM April 2019 TO March 2022   | STATEMENT ON TOP SECTOR-WISE FDI EQUITY INFLOW FROM April 2019 TO March 2022   |
|--------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------|--------------------------------------------------------------------------------|
| Sr. No.                                                                        | Sector                                                                                                                    | Amount of FDI Equity Inflow (InUSD Million)                                    | %age of Total FDI Equity Inflow                                                |
| (1)                                                                            | (2)                                                                                                                       | (3)                                                                            | (4)                                                                            |
| 1                                                                              | COMPUTER SOFTWARE & HARDWARE                                                                                              | 48,279                                                                         | 29                                                                             |
| 2                                                                              | SERVICES SECTOR (Fin., Banking, Insurance, Non Fin/Business, Outsourcing, R&D, Courier, Tech. Testing and Analysis,Other) | 20,045                                                                         | 12                                                                             |
| 3                                                                              | CONSTRUCTION (INFRASTRUCTURE) ACTIVITIES                                                                                  | 13,164                                                                         | 8                                                                              |
| 4                                                                              | TRADING                                                                                                                   | 11,720                                                                         | 7                                                                              |
| 5                                                                              | AUTOMOBILE INDUSTRY                                                                                                       | 11,455                                                                         | 7                                                                              |
| 6                                                                              | METALLURGICAL INDUSTRIES                                                                                                  | 5,713                                                                          | 3                                                                              |
| 7                                                                              | TELECOMMUNICATIONS                                                                                                        | 5,505                                                                          | 3                                                                              |
| 8                                                                              | EDUCATION                                                                                                                 | 5,245                                                                          | 3                                                                              |
| 9                                                                              | HOTEL & TOURISM                                                                                                           | 4,036                                                                          | 2                                                                              |
| 10                                                                             | NON-CONVENTIONAL ENERGY                                                                                                   | 3,792                                                                          | 2                                                                              |

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## ANNEXURE-II

## ANNEXURE REFERRED TO IN REPLY TO PART (b) OF THE LOK SABHA USTARRED QUESTION NO. 3494 FOR ANSWER ON 22.03.2023.

Details of Sectors wherein in FDI has increased in past 8 years, as compared   to preceding 8 years, in descending order of FDI Equity Inflow from April 2014 to March 2022 ( excluding reinvested earnings, other capital and equity in incorporated bodies )

| SECTOR-WISE COMPARISON of Amount of FDI Equity Inflow (In USD Million) (Approx.)   | SECTOR-WISE COMPARISON of Amount of FDI Equity Inflow (In USD Million) (Approx.)                                          | SECTOR-WISE COMPARISON of Amount of FDI Equity Inflow (In USD Million) (Approx.)   | SECTOR-WISE COMPARISON of Amount of FDI Equity Inflow (In USD Million) (Approx.)   | SECTOR-WISE COMPARISON of Amount of FDI Equity Inflow (In USD Million) (Approx.)   |
|------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------|------------------------------------------------------------------------------------|------------------------------------------------------------------------------------|
| Sl. No                                                                             | Sector                                                                                                                    | April 2006 to March 2014                                                           | April 2014 to March 2022                                                           | Growth%                                                                            |
| (1)                                                                                | (2)                                                                                                                       | (3)                                                                                | (4)                                                                                | (5)                                                                                |
| 1                                                                                  | COMPUTER SOFTWARE & HARDWARE                                                                                              | 9,599                                                                              | 72,700                                                                             | 657                                                                                |
| 2                                                                                  | SERVICES SECTOR (Fin., Banking, Insurance, Non Fin/Business, Outsourcing, R&D, Courier, Tech.Testing and Analysis, Other) | 37,628                                                                             | 54,689                                                                             | 45                                                                                 |
| 3                                                                                  | TRADING                                                                                                                   | 5,132                                                                              | 29,440                                                                             | 474                                                                                |
| 4                                                                                  | CONSTRUCTION (INFRASTRUCTURE) ACTIVITIES                                                                                  | 2,575                                                                              | 25,407                                                                             | 887                                                                                |
| 5                                                                                  | TELECOMMUNICATIONS                                                                                                        | 12,098                                                                             | 24,168                                                                             | 100                                                                                |
| 6                                                                                  | AUTOMOBILE INDUSTRY                                                                                                       | 8,580                                                                              | 23,030                                                                             | 168                                                                                |
| 7                                                                                  | CHEMICALS (OTHER THAN FERTILIZERS)                                                                                        | 8,864                                                                              | 9,785                                                                              | 10                                                                                 |
| 8                                                                                  | HOTEL & TOURISM                                                                                                           | 6,880                                                                              | 9,269                                                                              | 35                                                                                 |
| 9                                                                                  | METALLURGICAL INDUSTRIES                                                                                                  | 7,644                                                                              | 8,940                                                                              | 17                                                                                 |
| 10                                                                                 | NON-CONVENTIONAL ENERGY                                                                                                   | 2,997                                                                              | 8,618                                                                              | 188                                                                                |
| 11                                                                                 | ELECTRICAL EQUIPMENTS                                                                                                     | 2,927                                                                              | 7,369                                                                              | 152                                                                                |
| 12                                                                                 | EDUCATION                                                                                                                 | 941                                                                                | 6,777                                                                              | 620                                                                                |
| 13                                                                                 | INFORMATION & BROADCASTING (INCLUDING PRINT MEDIA)                                                                        | 3,511                                                                              | 5,962                                                                              | 70                                                                                 |
| 14                                                                                 | HOSPITAL & DIAGNOSTIC CENTRES                                                                                             | 2,163                                                                              | 5,644                                                                              | 161                                                                                |
| 15                                                                                 | CONSULTANCY SERVICES                                                                                                      | 1,939                                                                              | 5,524                                                                              | 185                                                                                |
| 16                                                                                 | RETAIL TRADING                                                                                                            | 107                                                                                | 3,856                                                                              | 3515                                                                               |
| 17                                                                                 | SEA TRANSPORT                                                                                                             | 1,051                                                                              | 3,715                                                                              | 254                                                                                |
| 18                                                                                 | INDUSTRIAL MACHINERY                                                                                                      | 2,668                                                                              | 3,413                                                                              | 28                                                                                 |
| 19                                                                                 | AIR TRANSPORT (INCLUDING AIR FREIGHT)                                                                                     | 476                                                                                | 3,050                                                                              | 541                                                                                |
| 20                                                                                 | CEMENT AND GYPSUM PRODUCTS                                                                                                | 2,190                                                                              | 2,612                                                                              | 19                                                                                 |
| 21                                                                                 | TEXTILES (INCLUDING DYED,PRINTED)                                                                                         | 1,217                                                                              | 2,583                                                                              | 112                                                                                |
| 22                                                                                 | ELECTRONICS                                                                                                               | 803                                                                                | 2,267                                                                              | 182                                                                                |
| 23                                                                                 | MINING                                                                                                                    | 952                                                                                | 2,252                                                                              | 136                                                                                |
| 24                                                                                 | FERMENTATION INDUSTRIES                                                                                                   | 1,604                                                                              | 1,995                                                                              | 24                                                                                 |
| 25                                                                                 | RUBBER GOODS                                                                                                              | 1,360                                                                              | 1,838                                                                              | 35                                                                                 |

|   26 | PRINTING OF BOOKS (INCLUDING LITHO PRINTING INDUSTRY)   | 370   | 1,799   |   386 |
|------|---------------------------------------------------------|-------|---------|-------|
|   27 | MEDICAL AND SURGICAL APPLIANCES                         | 700   | 1,629   |   133 |
|   28 | SOAPS, COSMETICS & TOILET PREPARATIONS                  | 653   | 1,506   |   131 |
|   29 | PRIME MOVER (OTHER THAN ELECTRICAL GENERATORS)          | 1,058 | 1,471   |    39 |
|   30 | GLASS                                                   | 331   | 859     |   160 |
|   31 | DIAMOND,GOLD ORNAMENTS                                  | 387   | 780     |   102 |
|   32 | RAILWAY RELATED COMPONENTS                              | 470   | 721     |    53 |
|   33 | AGRICULTURAL MACHINERY                                  | 187   | 641     |   243 |
|   34 | VEGETABLE OILS AND VANASPATI                            | 383   | 623     |    63 |
|   35 | FERTILIZERS                                             | 263   | 394     |    50 |
|   36 | BOILERS AND STEAM GENERATING PLANTS                     | 61    | 314     |   411 |
|   37 | EARTH-MOVING MACHINERY                                  | 145   | 313     |   117 |
|   38 | SUGAR                                                   | 45    | 184     |   310 |
|   39 | SCIENTIFIC INSTRUMENTS                                  | 129   | 164     |    28 |
|   40 | GLUE AND GELATIN                                        | 9     | 138     |  1374 |
|   41 | TIMBER PRODUCTS                                         | 85    | 129     |    52 |
|   42 | LEATHER, LEATHER GOODS AND PICKERS                      | 95    | 109     |    15 |
|   43 | DYE-STUFFS                                              | 17    | 83      |   398 |
|   44 | DEFENCE INDUSTRIES                                      | 5     | 8       |    55 |

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