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Rising Foreign Direct Investments Augurs Well for India
Jul 3, 2017

Foreign Direct Investments (FDI) plays an important role in the economic development of a country. It is a source of long term capital that helps build critical infrastructures in the economy. It also aids in technology knowledge transfers, fosters innovation and helps raise productivity too. In short, having a steady flow of FDI inflows would help India to achieve necessary investments that will help accelerate economic growth and development.

In addition, the inflows acts as a catalyst for domestic industrial development. Since 2014, the Modi led government has laid a great emphasis on welcoming global best practices to be employed in India.

The government began this with the launch of 'Make in India' initiative in September 2014. Further, the government has carried out FDI reforms in sectors like rail infrastructure, defence and in financial sector, medical devices and construction sectors etc.

In addition, initiatives such as introduction of composite caps in the FDI policy and raising the FIPB approval limit were also undertaken to promote ease of doing business in the country.

All of this has meant ever rising inflows of FDI into India. FY17 saw the highest inflows at US $60 billion in the past four years. It will be crucial for the country going forward to maintain this momentum of inflows to help drive the economic development of the Indian economy.

Data Source: Livemint

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