Government has put in place an investor-friendly policy on FDI, under which FDI, up to 100%, is permitted, under the automatic route, in most sectors/activities. Foreign Direct Investment (FDI) policy is reviewed on an ongoing basis, with a view to making it more investor friendly. Significant changes have been made in the FDI policy regime in the recent times, to ensure that India remains increasingly attractive and investor-friendly.

Government plays an active role in investment promotion, through dissemination of information on the investment climate and opportunities in India and by advising prospective investors about investment policies and procedures and opportunities. International Cooperation for industrial partnerships is solicited both through bilateral and multilateral arrangements. It also coordinates with apex industry associations, such as FICCI, CII and ASSOCHAM, in their activities relating to promotion of industrial cooperation, both through bilateral and multilateral initiatives intended to stimulate inflow of foreign direct investment into India.The Government has also set up ‘Invest India’, a joint venture company between the Department of Industrial Policy & Promotion and FICCI, as a not-for-profit, single window facilitator, for prospective overseas investors and to act as a structured mechanism to attract investment focused on MSME Sector.

A high level group has been constituted by the Government under the Minister of Consumer Affairs to examine various issues concerning internal trade and to make recommendation for internal trade reforms. The major safeguard for MSMEs in the extant FDI policy on multi brand retail trading is that at least 30% of the value of procurement of manufactured/ processed products purchased by the multi brand retailer is to be sourced from Indian small industries. In a recent review, the government has included medium enterprises and farmers /agri cooperatives under the sourcing requirement. This safeguard is expected to strengthen the MSMEs and facilitate their integration in the value chain.

The information was given by the Minister of State in the Ministry of Commerce and Industry Dr. E.M. Sudarsana Natchiappan in Rajya Sabha today.

Foreign direct investment policy expanded to allow broad automatic FDI and require domestic sourcing safeguards in retail. The policy permits broad Foreign Direct Investment on the automatic route with continuous review to enhance investor friendliness; the Government actively promotes and facilitates investment through information, advisory support, international cooperation, industry partnership and a single window facilitator, Invest India. A high level group will examine internal trade reforms, and multi brand retail is subject to a domestic sourcing requirement obliging retailers to procure a designated share of manufactured/processed goods from Indian small and medium enterprises and farmer/agri cooperatives to bolster MSME integration.