Lok Sabha Question No. 1155 (UNSTARRED), answered on 2025-02-11
Subject: New Policy to Attract Foreign Investment
Ministry: COMMERCE AND INDUSTRY
Asked by: Shri Satpal Brahamchari, Shri Nalin Soren, Shri Chandan Chauhan

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

## LOK SABHA

UNSTARRED QUESTION NO. 1155.

TO BE ANSWERED ON TUESDAY, THE 11 TH  FEBRUARY, 2025.

## NEW POLICY TO ATTRACT FOREIGN INVESTMENT

1155.  SHRI SATPAL BRAHAMCHARI: SHRI CHANDAN CHAUHAN: SHRI NALIN SOREN:

Will the Minister of COMMERCE AND INDUSTRY

be pleased to state: वाणिज्य एवं उद्योग मंत्री

- (a) whether  the  Government  has  formulated  any  new  policy  to  attract  foreign investment in the country;
- (b) if so, the details thereof;
- (c) the nature of impact likely to have on the Indian economy in view of the said policy;
- (d) whether the said policy is likely to help in job creation; and
- (e) if so, the details thereof?

## ANSWER

## वाणिज्य एवं उद्योग मंत्रालय में राज्य मंत्री ( श्री णिणिन प्रसाद ) THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE & INDUSTRY (SHRI JITIN PRASADA)

- (a) to (e): The  Government  has  put  in  place  a  policy  framework  for  Foreign  Direct Investment (FDI) that is transparent, predictable, and easily comprehensible. This  framework  is  embodied  in  the  Consolidated  FDI  Policy  circular  dated 15.10.2020 as amended from time to time (FDI Policy).

To promote FDI, 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. More than 90% of the FDI inflow is  received  under  the  automatic  route.  India  has  embarked  on  a  series  of reforms  aimed  at  liberalizing  its  FDI  policies,  with  the  goal  of  stimulating economic growth and encouraging foreign capital inflows. In the recent past, reforms in the FDI Policy have been undertaken in sectors such as Defence, Insurance, Petroleum & Natural Gas, Telecom and Space. FDI in the Defence sector is allowed up to 74% through Automatic Route (from earlier 49%) for companies seeking new industrial licenses. Further, 100% FDI in the Telecom Sector is allowed under Automatic Route. FDI sectoral cap in the insurance sector has been revised from 49% to 74% under the automatic route. The Union Budget 2025 also announced for the further increase of FDI sectoral cap for the insurance sector from 74% to 100%. This enhanced limit will be available for those companies, which invest the entire premium in India.

Further,  the  Government  of  India  always  strives  to  attract  more  FDI  by removing regulatory barriers, streamlining processes, developing infrastructure, bettering logistics and improving the business environment by enhancing the Ease of Doing Business (EoDB). The Government, through the Jan Vishwas (Amendment of Provisions) Act, 2023, has decriminalized 183 provisions across 42 Central Acts from 19 Ministries/Departments to enhance the Ease of Living and EoDB. The Government will also be bringing up the Jan Vishwas 2.0 bill, aiming to further improve the business environment. In the Union  Budget  2025,  it  was  announced  that  a  High-Level  Committee  for Regulatory Reforms  will be setup to strengthen trust-based  economic governance and take transformational measures to enhance EoDB, especially in matters of inspections and compliances. To further strengthen a seamless business regulatory framework across the country and nudge states to promote healthy competition to attract investment including  FDI,  various  initiatives  are  being  undertaken.  The  Government  of India  released  Business  Reforms  Action  Plan  (BRAP)  2024  rankings  and Logistics  Ease  Across  Different  States  (LEADS)  2024  report  to  inter-alia communicate to potential investors examples of positive business ecosystem as well as logistics performance undertaken by various States and UTs. Further in the Union Budget 2025 it was announced that an Investment Friendliness Index  of  States  will  be  launched  in  2025  to  further  the  spirit  of  competitive cooperative federalism.

FDI directly supplements the domestic capital and brings technology and skill to  the  sectors  of  direct  entry.  It  also  has  indirect  multiplier  effects  on  other related  sectors  thereby  stimulating  economic  growth  leading  to  increased production,  exports  and  employment  generation.  The  convergence  of  all aforementioned initiatives will further streamline regulatory processes, bolster economic growth, and foster greater investor confidence in India's business landscape.

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