New Delhi: According to sources, the government is considering setting up a foreign investment regulatory mechanism for post-investment review and monitoring of investments in the country. He said that at present the idea is only at the discussion stage.
“It has been observed that all countries keep a watch on foreign direct investment ,foreign direct investment), which is coming to their country. People suggest that there should be a monitoring mechanism in India also. “This is a kind of monitoring of the money that is coming into the country in the form of FDI,” said a source.
This can help ascertain whether FDI coming into the country is beneficial to the economy and comes from legitimate sources.
India is a major destination for FDI given its $1.4 billion market, stable policies, demographic dividend, good investment returns and skilled workforce.
The government has taken several measures to attract foreign investment such as promoting ease of doing business by simplifying procedures and significantly reducing the compliance burden for the industry.
The government eased FDI norms in several sectors such as space, e-commerce, pharma, civil aviation, contract manufacturing, digital media, coal mining and defence, besides launching a production-linked incentive (PLI) scheme for 14 years. Is. Sectors like electronics and white goods.
Ease of doing business, zero tolerance towards corruption and efforts focused on emerging sectors like electronics have helped promote ‘Make in India’ and attract domestic and foreign investment into the country, the official said.
The ‘Make in India’ initiative was launched on 25 September 2014 to facilitate investment, promote innovation, create world-class infrastructure and make the country a hub of manufacturing, design and innovation.
Over the last 10 fiscal years, FDI inflows have increased by 119 per cent to US$ 667 billion compared to US$ 304 billion in the previous 10 years (2005–14), comprising more than 90 per cent of the total FDI. Received through the automatic route.
According to government data, foreign direct investment into India rose 47.8 per cent to US$16.17 billion in April-June in the current financial year due to healthy inflows into services, computer, telecom and pharma sectors.
The government is also developing industrial townships to promote domestic manufacturing and attract foreign investors by providing world-class infrastructure.
India receives maximum investments from countries like Mauritius, Singapore, USA, Netherlands, UAE, Cayman Islands, Cyprus, Japan, UK and Germany.
Sectors that attract healthy foreign inflows include services, computer software and hardware, telecommunications, pharma and chemicals.
On the question of whether India needs a dedicated law to deal with national security risks from FDI, Saurav Kumar, partner, IndusLaw, said that a dedicated law to deal with national security risks in foreign investment is a matter of international law for India. Can strengthen the position of. To provide clearly defined legal grounds for rejecting investments on national security grounds.
“This will not only reduce the risk of international challenges but will also demonstrate that India’s actions are transparent, predictable and in line with global best practices,” Kumar said.
Rudra Kumar Pandey, partner, Shardul Amarchand Mangaldas & Co, said it is important that a specific domestic law is introduced that lays down the parameters for processing a foreign investment application, aspects related to national security risk, threshold limits for determining the beneficial owner. But provides clear guidelines. Appointment of a nodal officer to interact with the applicant, regular updates to bring transparency in the approval process, providing specific grounds for rejection and other relevant provisions.
“The objective of enacting specific domestic laws should be to bring certainty in the processing of foreign investment applications and give confidence to investors to come forward with their applications,” Pandey said.
