The Government Backing Foreign Investment in India by Forming Right Policies and Initiatives

Nitin Konde, Apoorva Bajj

Aug 8, 2024 — 3 min read

The Government Backing Foreign Investment in India by Forming Right Policies and Initiatives

There have been several initiatives by the government aimed at increasing investment and attracting more manufacturing to the nation. To facilitate the country's overall industrial growth, the Indian government intervenes with suitable policies via the Department of Promotion of Industry and Internal Trade (DPIIT) and other Central Ministries/Departments. This Department has implemented numerous programs to support and encourage industry in Andhra Pradesh, Maharashtra, and Uttar Pradesh, among others.

These programs include Make in India, Startup India, PM GatiShakti, the National Industrial Corridor Programme, the Production Linked Incentive (PLI) Scheme, the National Single Window System (NSWS), the India Industrial Land Bank, the Project Monitoring Group (PMG), the liberalization of foreign direct investment (FDI) policy, the Indian Footwear and Leather Development Programme (IFLDP) Scheme, and many more. Project Development Cells (PDCs) have been established in all relevant Ministries and Departments of the Government of India as an institutional structure to expedite investments.

Foreign Direct Investment (FDI) Inflows

Furthermore, the government has taken numerous steps to encourage FDI (Foreign Direct Investment). Except for a few key sectors, the government has instituted a policy that is investor-friendly and allows 100% FDI through the automatic route in the majority of industries. The automated route receives over 90% of the foreign direct investment. By increasing FDI limits, reducing regulatory hurdles, building infrastructure, and improving the business environment, India keeps its economy open to foreign investors.

To improve the ease of doing business and ease of living, the government has taken measures to streamline, digitize, simplify, and decriminalize the government-to-business (G2B) and Citizen Interface throughout all the states and union territories. We have reduced more than 42,000 compliances and decriminalized more than 3,800 provisions so far.

The goal of the Jan Vishwas (Amendment of Provisions) Act, 2023 is to make laws and regulations more compliance-based and to decriminalize small infractions so that trust-based government can progress. A total of 183 sections in 42 statutes overseen by 19 government agencies were decriminalized under the Act. According to the World Bank's Doing Business Report (DBR), 2020, which was released in October 2019, India is ranked 63rd. After falling to 142nd place in 2014, India jumped 79 spots in just 5 years to 63rd place in 2019.

National Single Window System

As a central hub for all national regulatory approvals and services, the National Single Window System (NSWS) site was established by the Department for Promotion of Industry and Internal Trade (DPIIT). To make conducting business in India easier, the NSWS platform is working to standardize G2B ecosystems.

Through its centralized access to over 270 G2B services, PAN-based authentication and registration, and national gateway, the platform encourages accountability, information symmetry, and transparency within the G2B ecosystem. Businesses can now access the necessary G2B services without having to register for various interfaces, thanks to this development. Various clearance systems of the Government of India and its state governments are integrated into the national site.

The NSWS Portal is now connected with the approval processes of thirty-two federal ministries and departments and twenty-eight state and territory single window systems. With NSWS, one can apply for 2,977 state permissions and 277 federal clearances. The Know Your Approval (KYA) module of NSWS provides businesses with information about 6,198 state approvals and 653 central approvals.