Business

India’s Liberalised FDI Policy Boosts Investor Confidence And Sectoral Growth

India’s liberalised foreign direct investment (FDI) policy is providing global investors with a stable and predictable environment, while offering sector-neutral opportunities across its rapidly expanding economy, according to Deloitte India.

The firm noted that key sectors such as pharmaceuticals, automotive, and tourism are not only attracting substantial FDI but are also acting as vital engines of employment, exports, and innovation.

Policy Reforms Strengthen Investor Appeal

In a significant policy shift, India now permits 100 per cent FDI under the automatic route across most sectors, including pivotal areas like insurance, insurance intermediaries, tourism construction, hospitals, and medical devices.

This reform reflects the government’s intention to promote openness and ensure regulatory stability for international investors.

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Rumki Majumdar, Economist at Deloitte India, highlighted, “The move signals not just openness but stability, offering global investors predictable, sector-agnostic opportunities to enter India’s vast and growing economy.”

Infrastructure Push And Investment Zones

Additionally, India’s investment climate is being bolstered by initiatives such as the USD 70-billion National Monetisation Pipeline and the development of industrial corridors across more than 100 cities.

These efforts are creating plug-and-play, investment-ready zones designed to streamline project execution for foreign players.

Majumdar also pointed out that sectors like tourism—which contributes over USD 199.6 billion to the GDP and hospitality have become increasingly attractive, now permitting 100 per cent FDI in hotel and recreation infrastructure.

This liberalisation, combined with infrastructure investment, is unlocking new opportunities across logistics, real estate, and urban development.

FDI Inflows See Substantial Rise

India’s recent FDI reforms are already showing results. Between April and December of the 2024–25 fiscal year, FDI inflows surged by 27 per cent to USD 40.67 billion, compared with USD 32 billion during the same period in 2023–24.

Furthermore, India is cementing its position in global trade through a series of bilateral and multilateral trade agreements.

These agreements are progressively eliminating tariff and non-tariff barriers, reinforcing the ‘Make in India’ initiative, and enhancing India’s stature as a pivotal player in international commerce.

“These agreements are removing trade barriers, bolstering the Make in India thrust, and supporting India’s long-term pivot to becoming a key global commerce hub,” Majumdar concluded.

Richa Kaushik

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