Budget 2024: Easier norms for FDI, overseas investments proposed

Finance Minister Nirmala Sitharaman proposed to ease norms for foreign direct investment (FDI) and overseas investment, in her Budget speech Tuesday.

“The rules and regulations for Foreign Direct Investment and Overseas Investments will be simplified to facilitate foreign direct investments, nudge prioritization, and promote opportunities for using Indian Rupee as a currency for overseas investment,” she said.

The easing assumes significance as FDI inflows into India shrank 3.49% on-year in FY24 to $44.42 billion from $46.03 billion in FY23 particularly from Mauritius, Singapore, the US, the UK, the UAE, Cayman Islands, Germany and Cyprus.


Overseas investment in the services sector, which includes banking, financial services and insurance, outsourcing and R&D, was down 24% on-year while that in computer software and hardware decreased 15%.

As per the United Nations Trade and Development (UNCTAD) World Investment Report 2024 released last month, FDI inflows into India fell to $28.1 billion in 2023 from $49.3 billion in 2022 with the country slipping seven notches to rank 15 in the World Investment Ranking in 2023,

“Among the top 20 host economies, the largest absolute drops were registered in France, Australia, China, the US and India, in that order,” it said.

The government has been looking at further liberalising FDI and internal discussions are ongoing. Earlier this year, India allowed 100% FDI in the space sector.