India received its highest ever FDI (Foreign Direct Investment) inflow of Rs 6,31,050 crore in this fiscal Year 2021-22 said Som Parkash, Minister of State in the Ministry of Commerce and Industry.
The Foreign Direct Equity inflow in manufacturing sectors has risen to Rs 1,58,332 crore in the financial year 2021-22 from Rs 89,766 cr in the previous year, making it a hike of 76 percent.
According to the official announcement, the increase in FDI inflows is a result of the government's adjustments to its FDI policy. To entice foreign direct investment, a liberal and open policy was implemented. Under the automatic approach, all FDI is welcome in industries that are crucial from a strategic perspective.
Foreign investment is allowed automatically in the manufacturing sector. Manufacturing tasks may be self-performed by the investee or contracted out to legal manufacturers in India. The restrictions of the FDI Policy apply to this. A manufacturer does not need permission from the government to sell its goods in wholesale or retail settings, including online.
The Reserve Bank of India (RBI) has taken steps to increase foreign exchange inflows, including allowing foreign portfolio investment in commercial paper and non-convertible debentures with original maturities of up to one year as well as exempting incremental foreign currency non-resident (bank) and non-resident (external) rupee deposits from the Cash Reserve Ratio and Statutory Liquidity Ratio.
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