Foreign investments

Expectations of the 2021 budget in terms of foreign investments: will Modi’s government open more windows to attract FDI for “Make in India” in the 2021 budget?

Even though India suffered huge economic losses due to the foreclosure, foreign investor confidence remained high and India received the largest inflow of FDI to India ever.

Prime Minister Narendra Modi has constantly tried to attract foreign investors to invest in India. Whether in the fields of pharma, manufacturing or green energy, the government’s objective is to promote “Make in India” and make the country self-sufficient. Also in the next budget, the government could take steps to help investments reach the manufacturing and service sectors, with the aim of making them better able to broaden their horizons. “The 2021 budget will certainly boost foreign investment in India provided the budget allocation is favorable to various sectors such as manufacturing, electronics, automotive, etc.,” said Vishal Yadav, CEO and founder from FDI India, to Financial Express Online.

It will be imperative to build on forward-looking initiatives through digitization, identify key areas attracting high investment and put in place uniform and effective policies across the country, added Vishal Yadav. Therefore, there are high hopes in the 2021-2022 Union budget to further accelerate the investment environment in India, he added.

The highest FDI received during a pandemic

Even though India suffered huge economic losses due to the foreclosure, foreign investor confidence remained high and India received the largest inflow of FDI to India ever. The country received a total of $ 30 billion from April to September 2020, up from $ 26 billion in the same period last year, or 15% more FDI (in dollars) year-on-year.

In addition, with relaxed FDI standards, projections of FDI inflows are even higher in the years to come. The story of the growth of foreign direct investment in India is expected to create a favorable climate as there is growing interest among foreign investors in the country amid the continued reform measures by the government to further improve the business climate.

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“It is essential to facilitate the flow of capital – both debt and equity – to manufacturers. It is possible to both reduce interest rates and increase the availability of credit for manufacturers, ”Utkarsh Sinha, Utkarsh Sinha, managing director of Bexley Advisors, a specialist investment bank, told Financial Express Online. . The budget announcement of measures to support investments in the manufacturing sector (similar to the benefits of angel investors, reduced capital gains obligations and the creation of a fund of funds for the manufacturing sector) could help to stimulate equity growth in India, added Utkarsh Sinha. There is also a need to streamline input tax policies for international imports of manufacturing components and ensure that refunds are processed predictably and on time, he added.

Investment factors in India

The government taking initiatives at the forefront of FDI regimes, such as relaxing FDI standards for various sectors, including defense, coal mining, contract manufacturing and retail single-branded India is expected to be a strong candidate for investment from global investors in the time to come. Another factor driving the pace of growth is the “ease of doing business” as the government strives to reduce the burden of business compliance. The government has also made it mandatory to obtain prior approval for foreign investment countries that share a land border with India, to curb “opportunistic takeovers” of domestic firms.

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