Foreign investors willing to invest in India but skeptical about the red tape in the country may expect to get a relationship manager who can take care of the clearances. The government is planning to facilitate the clearances from the centre and local bodies by providing a relationship manager to the FDI investors, who are willing to invest over $500 million. DPIIT secretary Guruprasad Mohapatra said at an event that the government will bring this facility very soon. Many investors willing to invest in India have earlier complained about the tough clearance procedure in India.
The growth of FDI in India has remained tepid in the last three years. After growing by 25 per cent in FY15 and 23 per cent in FY16, the growth rate did not touch the double-digit mark in the next three years till FY19, according to the Department of Industrial Policy and Promotion. FDI growth rate in FY18 fell to a mere 1 per cent ahead of the uncertainty of Lok Sabha elections and due to weakness in Indian rupee.
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The government has been consistently taking steps to boost FDI investments in the country. A major step of cutting down the corporate tax is also expected to increase FDI investments in manufacturing. “Given the increasing US-China trade tensions, revision in corporate tax will attract FDI in the Indian manufacturing sector, as the revised tax structure is now in line with other emerging markets,” rating agency ICRA said.
Meanwhile, the government has also eased norms for FDI in the sectors of contract manufacturing, single-brand retail, coal, etc. Apparently, the three reasons why the government is pushing hard to boost FDI in the country are to get investments in the time of an ongoing economic slowdown; to improve the growth rate of FDI; and to tap the opportunity created by the US-China trade war, when many countries are trying to establish their businesses outside China.