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Foreign Direct Investment: Sectorwise FDI Limit, Countrywise FDI inflow, and FDI Inflow in India

FDI limits in different sectors in India 2020: India has attracted total FDI amount US$ 62,001 million in 2018-19. The service sector has the highest share in India's FDI share amount of US$ 80,670.79 from April 2000 to December 2019. Agriculture Animal Husbandry, Auto components, and E-commerce activities have the permission of 100% FDI through automatic route.
Apr 28, 2020 14:09 IST
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FDI data in India
FDI data in India

A Foreign Direct Investment (FDI) is an investment in by foreign investors in the foreign based company. Mainly there are two types of FDI, one is Green Field Investment (a fresh company is established in a foreign country) and the other is Portfolio Investment (shares of a foreign company are purchased or ownership acquired in a foreign company).

There are two ways to get investment approval in India one is getting approval from the automatic route or the RBI route and government route (also known as FIPB route).

FDI under the automatic route does not require prior approval either by the government of India or by the Reserve Bank of India. Investors only require to notify and file documents in the concerned RBI office. 

types-of-fdi-india

Following sectors are prohibited for FDI:

I. Lottery Business

II. Gambling and betting

III. The business of chit fund

IV. Nidhi Company

V. Trading in transferable development rights (TDRs)

VI. Manufacturing of cigars, cheroots, cigarillos and cigarettes, tobacco or its substitutes

VII. Atomic Energy

VIII. Railways Operation

Top 10 Countries with highest FDI Inflows in India (From April 2000 To December 2019):-

Country  

FDI inflow

 (Rs crore)

% Share

1. Mauritius

790,280.98

31.07

2.Singapore

587,820.17

20.72

3.Japan

193,069.72

7.24

4. Netherland

186,963.20

6.76

5.U.S.A

165,967.16

6.21

6.United Kingdom

148,437.69

6.12

7.Germany

68,050.40

2.64

8.Cyprus

53,230.40

2.21

9.France

40,038.02

1.55

10.UAE

41,168.87

1.51

Name of major sectors where FDI is permitted but caps are put on these sectors:

S. No

Sector

Sectoral Cap/ Route

1.

Defence Industry

49% automatic route

2.

Civil Aviation

49% FDI (100 percent for NRIs) Automatic

3.

Asset Reconstruction Companies (ARCs)

100 % (FDI + FII) – by FIPB if beyond 49%

4.

Banking: Private Sector

Banking: Public Sector

74% (FDI + FII) by FIPB  if beyond 49%

20% (FDI + FII) FIPB

5.

Broadcasting

(i) FM Radio

(ii) Cable Network

(iii) DTH

26% (FDI + FII) FIPB

49% (FDI + FII) Automatic

74% (FDI + FII) FIPB beyond

49% , 26% (FDI + FII) FIPB

6.

Commodity Exchanges

49% (26% FDI + 23% FII) Automatic

7.

Credit Information Companies (CICs)

74% Automatic (FII only 24 %)

8.

Insurance

49%; up to 26% automatic and beyond it FIPB

9.

Stock Exchanges, Depositories, Clearing Corp

49% (26% FDI + 23% FII) Automatic

10.

Petroleum and Natural Gas Refining

49% FDI in case of PSUs Automatic

11.

Publishing of Newspapers and Current Affairs News

26%(FDI+FII) FIPB

12.

Security Agencies in the Private Sector

49 % FIPB

13.

Satellite and Establishment and Operation

74 % FIPB

14.

Single Brand Product Retailing

100% subject to sourcing conditions, FIPB beyond 49%

15.

Multi Brand Product Retailing

51% FIPB-subject to various conditions

16.

Telecom Services

100% FDI - FIPB beyond 49%

17.

Pharma Sector (Brownfield)

100 % FIPB except for medical devices

18.

Power Exchanges

29% (26 % FDI+23% FII) automatic

19.

Railway Infrastructure

100% percent automatic, FDI beyond 49% percent in sensitive areas from a security point of view

20.

Construction Development Projects

100% automatic- subject to various conditions.

India has attracted total FDI amount US$ 62,001 million in 2018-19. The service sector has the highest share in India's FDI share amount of US$ 80,670.79 from April 2000 to December 2019.

FDI Inflow in India (From 2014 to 2018)

S. No.

Financial Year

Total FDI Inflow

(amount in US$ million)

1

2014-15

45,148

2

2015-16

55,559

3

2016-17

60,220

4

2017-18 (P)

60,974

5

2018-19 (P)

62,001

 

Total

283,902

Mauritius has the highest FDI inflow in India From April 2000 To December 2019. Its contribution was Rs 790,280 for this period. This was 31% of the total FDI India received during this period.

Singapore was on second place with Rs. 587,820 and Japan on third place with FDI inflow of Rs. 193,069.

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