In a significant move, the Commerce and Industry Ministry on Wednesday, released the next edition of its consolidated foreign direct investment (FDI) policy document, incorporating all the changes made over the past year.  The new circular was released by the Department for Promotion of Industry and Internal Trade (DPIIT).  It comes into from from 15 October.

The consolidated policy is a compilation of various decisions taken by the government in connection with FDI in different sectors. Investors would otherwise have to go through various PRs issued by the department, and the RBI regulations to understand the policy. The whole exercise is aimed at providing an investor-friendly climate to foreign players and, in turn, it attracts more FDI to boost economic growth and create jobs.

The government has relaxed FDI policy in many sectors, including coal mining, digital news, contract manufacturing and single-brand retail trading. Foreign direct investment (FDI) in India has increased by 16 pc Y-o-Y to USD27.1 billion during April-August this year. The DPIIT has also included the decision wherein the government in April made its prior approval mandatory for foreign investments from countries that share land border with India to curb "opportunistic takeovers" of domestic firms following the COVID-19 pandemic.

These countries include China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar, and Afghanistan. The competent authorities for grant of approval for such foreign investments would be the concerned administrative ministry/department as identified by the DPIIT, according to the circular.

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