Changes in Foreign Investment Rules

During his last visit to Germany in April 2015, Hon. Prime Minister apprised the German companies that the regulatory regime in India is much more transparent, responsive and stable. Lots of efforts have been made and are still underway to improve the Ease of Doing business in the Country. Steps have been taken to open up more FDI in key areas like insurance, construction, defence, railways and medical devices. Procedures are being simplified and digital technology is being used to eliminate multiple approvals. A predictable, stable and competitive tax regime is being built.

FDI policy is reviewed on an ongoing basis, with a view to making it more investor-friendly. Significant changes are made in the FDI policy regime, from time to time, to ensure that India remains an increasingly attractive investment destination.

As per the extant FDI policy, any non-resident entity can invest in India, subject to the FDI Policy except in those sectors/ activities which are prohibited. However, a citizen of Bangladesh or an entity incorporated in Bangladesh can invest only under the Government route. Further, a citizen of Pakistan or an entity incorporated in Pakistan can invest, only under the Government route, in sectors/ activities other than defence, space and atomic energy and sectors/ activities prohibited for foreign investment.

This information was given by the Minister of State (Independent Charge) in the Ministry of Commerce & Industry Smt. Nirmala Sitharaman in a written reply in Lok Sabha today