India receives highest-ever FDI inflow in last financial year

Tags: Economy/Finance

According to the Ministry of State for Commerce and Industry India has received the highest-ever Foreign Direct Investment inflow of over six lakh 31 thousand crore rupees in the last financial year.

Important facts

• The central government has formulated a liberal and transparent policy to attract foreign direct investment.

• FDI equity inflow into manufacturing sectors has also increased by 76 per cent in the last financial year as compared to 2020-21 to more than one lakh 58 thousand crore rupees.

What is FDI?

• Foreign direct investment or FDI is an investment made by a party of one country in a business or corporation operating in another country with the intention of earning long-term profits. 

• Through FDI, foreign companies are directly involved in the day-to-day operations of another country.

Routes to gets FDI in India

• Foreign investment in India can be done mainly through two routes -

1. Automatic Route -   Under this route, the non-resident investor or the Indian company does not require any approval from the Government of India for investment.

2. Government route - Under this route, prior to investment, approval from the Government of India is required. Proposals for foreign direct investment under this route are considered by the respective Administrative Ministry/ Department.