FDI and Investment-friendly policies -
The various investment-friendly policies announced by the Government of India welcomes Foreign Direct Investment (FDI) in many of the core industries. These policies fundamentally aim at improving the core business activities of the country and at the same time offer employment to millions of educated population of the country.
Government has facilitated the business activities by allotting special land to major industries and service sectors. These include the Technology Park (both hardware and software), Special Economic Zones (SEZs), Export Promotion Zones (EPZs), etc. Apart from these are the Growth Center Schemes that provide various incentives to the investors.
For most of the industries and the service sectors FDI is allowed freely through automatic approval from the Reserve Bank of India (RBI). However, there are certain sectors/ activities where the FDI is not allowed beyond a certain limit. These businesses or activities need to get the approval from the government, which in turn is decided on the basis of the recommendations from the Foreign Investment Promotion Board (FIPB).
The following are the important sectors where FDI is allowed freely.
- Infrastructure: it includes various segments such as power generation and transmission; projects on various energy sources; roads, highways, ports, and other mass transport systems.
- Airport development
- Construction activities
- Manufacturing activities, except those items categorized under compulsory licensing or those allotted exclusively for the small-scale industries category
- Software development
- Electronic items
- Tourism and related activities
- Hospitals and pharmaceuticals
- Film production
- Food processing
- Finance companies, other than non-banking
- Courier services, except those with distribution of letters
- Business- to –Business e-commerce
- Trading activities that follow the prescribed norms
- ISPs that do not offer gateways and mail facilities
- Alcohol distilling and brewing
