How to attract more foreign investments? Stakeholders suggest some methods

The Indian government is exploring ways to attract more foreign investments. The Department for Promotion of Industry and Internal Trade (DPIIT) held discussions Wednesday with industry representatives and law firms to gather feedback on potential policy changes, ToI reported. The meeting comes ahead of the Union Budget on February 1.

The DPIIT sought suggestions on simplifying procedures for foreign direct investment (FDI). Discussions covered various sectors, including e-commerce, pharmaceuticals, financial services, agriculture, and private security.

Concerns were raised about the process for investments from China, which are now subject to stricter scrutiny. Participants requested clearer procedures and timelines for processing these applications. Suggestions included aligning non-debt instrument rules with FDI policy to allow up to 74% FDI in private security agencies.


Easing FDI regulations in agriculture and plantations was also proposed, aiming to reduce imports and boost domestic manufacturing. Another proposal called for allowing 100% FDI in research and development across all sectors to establish India as a research hub.

Some issues faced by foreign companies operating in India were also highlighted. “Foreign owned and controlled companies face ambiguities related to pricing of equity instruments, the possibility of engaging in share swaps, and entering into deferred payment consideration arrangements. These need to be clarified,” one source explained. The DPIIT is also looking into increasing the FDI cap for research and development and security agencies. The government aims to use this feedback to formulate policies to encourage increased FDI inflows.

(with ToI inputs)