Foreign Direct Investment (FDI) is a major driver of economic growth and an important source of non-debt finance for the economic development of India. It has been the endeavor of the Government to put in place an enabling and investor friendly FDI policy. The intent all this while has been to make the FDI policy more investor friendly and remove the policy bottlenecks that have been hindering the investment inflows into the country. The steps taken in this direction have borne fruit, as is evident from the ever-increasing volumes of FDI inflows being received into the country.

Measures taken by the Government on the fronts of FDI policy reforms, investment facilitation and ease of doing business have resulted in increased FDI inflows into the country. The following trends in India’s Foreign Direct Investment are an endorsement of its status as a preferred investment destination amongst global investors:

• During April to November, 2020, total FDI inflow of US$ 58.37 billion has been received. It is the highest ever for first 8 months of a financial year and 22% higher as compared to first 8 months of 2019-20 (US$ 47.67 billion).
• FDI equity inflow received during F.Y. 2020-21 (April to November, 2020) is US$ 43.85 billion. It is also the highest ever for first 8 months of a financial year and 37% more compared to first 8 months of 2019-20 (US$ 32.11 billion).

Foreign Direct Investment policy reforms drive record early-year inflows and signal stronger investor confidence in market openness. The Government's investor friendly FDI policy, together with targeted reforms in investment facilitation and ease of doing business, has resulted in the highest ever aggregate FDI inflows for the first eight months of a financial year and a marked increase in FDI equity inflows compared to the same period in the prior year, indicating strengthened investor confidence and the effectiveness of the measures taken.