Government Mulls Setting Up Foreign Investment Oversight Mechanism

The Indian government is considering establishing a foreign investment regulatory framework aimed at post-investment review and monitoring of foreign direct investments (FDI), sources revealed. Although still in the discussion phase, this initiative aims to enhance oversight of FDI inflows into the country.

"Many nations already conduct oversight on FDI entering their economies, and similar mechanisms have been proposed for India," a source stated. The oversight would ensure that FDI benefits the economy and originates from legitimate sources.

India, with its vast 1.4 billion market, stable policies, skilled workforce, and high investment returns, remains a prime destination for foreign investments. The government has already implemented various measures to attract FDI, such as simplifying regulations, reducing compliance burdens, and easing restrictions in sectors like e-commerce, pharma, civil aviation, and defence.

Further boosting foreign investments, the government launched the 'Make in India' initiative in 2014, which has significantly increased FDI inflows by 119% over the past decade, reaching $667 billion. Recent data shows a 47.8% jump in FDI inflows to $16.17 billion in April-June of this fiscal year, driven by investments in services, telecom, pharma, and computer sectors.

Additionally, the government is developing industrial townships and improving infrastructure to further enhance domestic manufacturing and attract foreign investors.

India’s key investment partners include Mauritius, Singapore, the US, and the UAE, with top sectors for FDI being services, software, telecom, and pharmaceuticals.