The Ministry of Commerce & Industry (MoCI) on February 11, 2025, notified regarding the comprehensive FDI Policy Framework for investments.
The Indian government has implemented an investor-friendly policy to promote Foreign Direct Investment (FDI), allowing 100% FDI under the automatic route in most sectors, except for a few strategically important ones. Over 90% of FDI inflows come through this automatic route. India has introduced several reforms to liberalize its FDI policies and attract foreign capital to stimulate economic growth.
Recent reforms include:
• Defence Sector: FDI allowed up to 74% through the Automatic Route (previously 49%) for companies with new industrial licenses.
• Telecom Sector: 100% FDI allowed under the Automatic Route.
• Insurance Sector: FDI cap raised from 49% to 74% under the automatic route. The 2025 Union Budget also announced plans to increase the cap to 100% for insurance companies investing the entire premium in India.
• Petroleum & Natural Gas and Space: Sector-specific reforms were also introduced to boost foreign investments.
These policy changes aim to encourage foreign investments, enhance economic growth, and increase capital inflows into the country.
The Indian government is committed to attracting more Foreign Direct Investment (FDI) by eliminating regulatory barriers, streamlining processes, and improving infrastructure, logistics, and the overall business environment. One key initiative is the Jan Vishwas (Amendment of Provisions) Act, 2023, which decriminalized 183 provisions across 42 Central Acts from 19 ministries and departments, aiming to enhance the Ease of Living and Ease of Doing Business (EoDB).
Additionally, the government plans to introduce Jan Vishwas 2.0 to further improve the business environment. The Union Budget 2025 also announced the formation of a High-Level Committee for Regulatory Reforms. This committee will focus on strengthening trust-based economic governance and implementing transformational measures to enhance EoDB, particularly in areas related to inspections and compliance. These efforts are part of India's broader strategy to create a more business-friendly environment and attract greater FDI.
[Release ID: 2101785]
