Why in the News?
India’s Foreign Direct Investment (FDI) inflows are expected to cross 90 billion dollars in FY 2025–26, according to the Department for Promotion of Industry and Internal Trade (DPIIT).
Key Facts
- FDI inflows (April–February 2025–26): 88 billion dollars
- Expected total for FY 2025–26: over 90 billion dollars
- Indicates strong investor confidence in India
What is Foreign Direct Investment (FDI)
- Investment by a foreign entity in:
- Business operations
- Assets in another country
- Involves long term interest and control
Key Drivers of Rising FDI
- Economic reforms by the government
- Expansion of Free Trade Agreements (FTAs)
- Strong economic growth prospects
- Improved ease of doing business
Types of FDI
- Greenfield Investment: Setting up new business operations
- Brownfield Investment: Investment in existing companies or assets
Role of DPIIT
- Works under the Ministry of Commerce and Industry
- Responsible for:
- FDI policy formulation
- Promotion of industrial development
- Facilitating investment inflows
Significance
- Boosts economic growth and employment
- Brings technology and expertise
- Strengthens infrastructure and manufacturing
- Improves balance of payments position
| [2020] With reference to Foreign Direct Investment in India, which one of the following is considered its major characteristic? (a) It is the investment through capital instruments essentially in a listed company. (b) It is a largely non-debt creating capital flow. (c) It is the investment which involves debt-servicing. (d) It is the investment made by foreign institutional investors in the Government securities. |
