India must pull all stops wooing FDI and making itself more attractive, the Economic Survey 2024-25 released on the eve of the Budget has said.
"There is room to improve tax certainty and tax stability in matters such as APA (Advance Pricing Agreement). India has simplified many of its laws, rules and regulations over the years leading to a regime shift in terms of the ease of doing business compared to yester years," the survey noted.
The Indian economy reached a milestone of $1 trillion inflows since April 2000 in the first half of the year.
Investment inflows at $55.6 billion in the first eight months of the year were 17.9 percent higher from the year-ago period.
“FDI in developing countries fell for a second year (-2%), with declines in Central and West Asia and South America. However, FDI increased marginally in ASEAN and more significantly in Africa, South Asia (India), and Central America and the Caribbean,” the Global Investment Trends report of the UN Trade and Development said.
India will look to capitalise on this trend in the coming fiscal as well. In an interview to Moneycontrol, economist and former IMF director Surjit Bhalla stressed on the need for policy correction to attract FDI.
The government has proposed to ease the FDI norms in the insurance sector, raising the quantum of investment from 74 percent to 100 percent.
“This significant shift in policy may also allow foreign insurers to operate independently in India. To diversify the capital flow of the sector, Finance minister Nirmala Sitharaman is likely to announce allowance of multiple insurance services to be provided by a single entity,” said Moin Lodha, partner, Khaitan.
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