Foreign Direct Investment
- The Foreign Direct Investment (FDI) policy rationalization and liberalization measures taken by the Government have resulted in increased inflows of FDI in more and more industries under the automatic route. In the year 2000, the Government of India allowed FDI up to 100 per cent on the automatic route for most activities; a small negative list was notified where either the automatic route was not available or there were limits on FDI. Since then, the policy has been gradually simplified and rationalized and more sectors have been opened up for foreign investment.
- Amount of FDI inflows for the financial year 2012-13 for the month of December 2012 was US$ 1.1 billion.
Amount of total FDI equity inflows into India (equity inflows + re-invested earnings + other capital) for the financial year 2012-13
(from April 2012 to December, 2012) was estimated at US$ 27.19 billion. Cumulative Amount of FDI Equity Inflows (excluding, amount remitted through RBI’s-NRI Schemes) (from April, 2000 to December, 2012) was recorded at US$ 187.80 billion.
- Top 10 Sectors attracting highest FDI inflows: During December 2012, top 10 Sectors attracting highest FDI inflows were: Services Sector (19 per cent), Construction development: Townships,housing, built-up infrastructure* (12 per cent), Telecommunications (7 per cent), Computer Software & Hardware (6 per cent), Drugs & Pharmaceuticals (5 per cent),Chemicals (other than Fertilizers) (5 per cent), Power (4 per cent), Automobile Industry (4 per cent), Metallurgical Industries (4 per cent), Hotel & Tourism (3 per cent).
*In line with the extant FDI policy, the Sectors “ Housing and Real Estates” &” Construction Activities” have been renamed as construction development: Townships, housing, built-up infrastructure and construction development projects and construction (Infrastructure) activities, respectively.
- Top 10 Investing Countries: Top 10 investing countries during December 2012 were: Mauritius (38 per cent), Singapore (10 per cent),U.K (9 per cent), Japan (7 per cent), U.S.A (6 per cent),Netherlands (5 per cent), Cyprus (4 per cent), Germany (3 per cent), France (2 per cent), U.A.E (1 per cent) .
India's Foreign Exchange (Forex) Reserves
- Foreign exchange reserves are an essential element in the analysis of an economy's external position. India's foreign exchange reserves comprise foreign currency assets (FCAs), gold, special drawing right (SDRs) and reserve tranche position (RTP) in the International Monetary Fund (IMF). Foreign exchange reserves are accumulated when there is absorption of the excess foreign exchange flows by the RBI through intervention in the foreign exchange market, aid receipts, interest receipts, and funding from institutions such as the International Bank for Reconstruction and Development (IBRD), Asian Development Bank (ADB) and International Development Association (IDA).
- The twin objectives of safety and liquidity are the guiding principles of foreign exchange reserves management in India, with return optimization being embedded strategy within this framework.
- During the year 2011-12, foreign exchange reserves stood at US$ 294.39 billion as compared to US$ 304.82 billion in the year 2010-11. In the current fiscal 2012-13, the reserves were recorded at US$ 290.57 billion as on March 01,2013.