The FDI inflows in India have changed considerably since the opening-up of the economy in 1991

India today is part of the top 100 Ease of Doing Business (EoDB) group. (Foreign direct investment) FDI inflows in India rose to $55.56 billion in 2015-16, $60.22 billion in 2016-17, $ 60.97 billion in 2017-18 and the nation reported its highest ever FDI inflow of $62.00 billion during the last financial year 2018-19.

The FDI inflows in India have changed considerably since the opening-up of the economy in 1991

The FDI inflows in India have changed considerably since the opening-up of the economy in 1991


This is primarily due to the ease of foreign direct investment (FDI) requirements across sectors of the economy. India today is part of the top 100 Ease of Doing Business (EoDB) group. (Foreign direct investment)FDI inflows in India amounted to $45.15 billion in 2014-15 and has gradually risen since then. In comparison, gross (foreign direct investment) FDI inflows increased by 55%, i.e. from US$ 231.37 billion in 2008-14 to US$ 358.29 billion in 2014-20, and (foreign direct investment) FDI inflows have increased by 57% from US$ 160.46 billion in 2008-14 to US$ 252.42 billion in 2014-20.

(Foreign direct investment) FDI inflows in India rose to $55.56 billion in 2015-16, $60.22 billion in 2016-17, $60.97 billion in 2017-18 and the nation reported its highest ever (foreign direct investment) FDI inflow of $62.00 billion (provisional) during the last financial year 2018-19. Moreover, in the period of 2019-20, the Government of India attracted more than $74 billion of investment through industries.

Total FDI inflows throughout the world over the last 20 years (April 2000-June 2020) amounted to $693.3 billion, although total FDI inflows earned over the last 5 years (April 2014-September 2019) amounted to $319 billion, accounting for almost 50 % of total FDI inflows over the last 20 years.

In FY 2020-21, cumulative FDI inflows of $35.73 billion have been received, the maximum ever in the first five months of the financial year, and 13 percent more than in the first five months of 2019-20 ($31.60 billion) and FDI inflows obtained during FY 2020-21 are US$ 27.10 billion, which is also the maximum in the first five months of the financial year and 16 percent more than in the first five months of the financial year.

Automated Path

Under the Automatic Path, the investment is not needed by a non-resident investor or an Indian business from the Government of India.

Path of Government

The Project Route needs the consent of the Government of India prior to the investment. Proposals for foreign direct investment under the Government Route shall be accepted by the relevant Regulatory Ministry / Department.


The main condition for FDI:

  1. Unscheduled Air Travel Services
  2. Helicopter services/seaplane services needing clearance by DGCA


Other conditions for FDI:

(a) Air Transport Services will comprise Domestic Scheduled Commercial Airlines; Unscheduled Air Transport Services, Helicopter and Seaplane Services provided by the Government of India.

(b) International airlines are permitted to invest in the shares of companies operating Cargo airlines, helicopters, and seaplanes, as set out in the limits and entry routes referred to above.

 (c) International airlines are also permitted to spend up to 49% of their paid-up resources in the resources of Indian companies running scheduled and non-scheduled air transport services. This expenditure will be subject to the following conditions:

  1. I will be carried out under the approval route of the State.
  2. The FDI and FII / FPI expenditure would be subsumed by the 49 percent cap.
  • Investments thus made will have to comply with the related SEBI regulations, such as the Capital Issue and Disclosure Standards (ICDR) Regulations / Substantial Acquisition of Securities and Takeovers (SAST) Regulations, as well as other appropriate rules and regulations.
  1. The Scheduled Operator Permit can only be issued to a company:
  2. licensed and has its principal place of business within the Government of India.
  3. The Chairman and at least two-thirds of the Directors of which are residents of India;
  • The extensive possession and efficient power of Indian nationals.
  • All foreign nationals expected to be affiliated with Indian scheduled and non-scheduled air travel services as a result of such expenditure shall be approved from a protection point of view prior to deployment;
  1. All technological equipment that may be brought into India as a consequence of such expenditure shall require the approval of the qualified authority within the Ministry of Civil Aviation.

The FDI limits/entry routes referred to in subsections and above shall apply where there is no expenditure by international airlines.

Dispensing for NRIs in respect of FDI up to 100% would also proceed with respect to the investment regime set out in paragraph

In addition to the requirements set out above, Foreign direct investment in M / s Air India Limited shall be subject to the following conditions: I Foreign direct investment in M / s Air India Ltd., including foreign airline(s), shall not exceed 49%, either directly or indirectly. (ii) Substantial possession and successful management of M / s Air India Ltd. shall remain with Indian Nationals.


  1. All information pertaining to the sectors as mentioned above is compatible with the current Consolidated Foreign Direct Investment (FDI) Policy provided by DPIIT as updated from time to time.
  2. In sectors/activities not stated above, (Foreign Direct Investment) FDI is allowed on an automated route of up to 100 percent, subject to relevant laws/regulations; protection, and other conditions.
  3. A non-resident person can invest in India, according to the (FDI) Foreign Direct Investment Regulation, except in those sectors/activities which are prohibited. However, an individual of a country that shares a land boundary with India or where the beneficial owner of investment in India is located in or is a citizen of any such country may only invest on a governmental basis. In addition, a citizen of Pakistan or an organization incorporated in Pakistan can invest in sectors/activities other than security, space, nuclear energy, and sectors/activities banned for Foreign Direct Investment only under the Government of India.


  • Lottery Business including Government of India/private lottery, online lotteries, etc
  • Gambling and Betting including casinos
  • Chit Funds
  • Nidhi Company
  • Real Estate Business or Construction of farmhouses
  • Manufacturing of cigars, cheroots, cigarillos, and cigarettes, of tobacco or of tobacco substitutes
  • Sectors not open to private sector investment- atomic energy, railway operations (other than permitted activities mentioned under the Consolidated Foreign Direct Investment (FDI policy)
  • Trading in Transferable Development Rights (TDR)


  • Global technology partnership in some way, including licensing for franchises, logos, brand names, management contracts, is often banned for Lottery Company and Gaming and Betting operations.
  • The real estate sector shall not involve the creation of town shops; the building of residential/commercial properties, roads or bridges, and Real Estate Investment Trusts (REITs) registered and governed under the SEBI (REITs) Regulations, 2014.


  1. Filing of Application
  • Proposal for international investment, along with supporting documentation to be uploaded electronically, to the Foreign Direct Investment Facilitation Platform


  1. External process for clearance
  • DPIIT will recognize the Ministry / Department concerned and distribute the request within 2 days. In addition, after the request is received, the same will also be circulated electronically to the RBI within 2 days for feedback from the FEMA point of view.
  • Proposed investment from Pakistan and Bangladesh will also need approval from the Ministry of Home Affairs.
  • DPIIT would be required to send comments within 4 weeks of receipt of online submission, and the Ministry of Home Affairs (if applicable) would be required to submit comments within 6 weeks.
  • Pursuant to the above, the claimant will be required to include additional information/clarifications within 1 week.
  • Proposals containing FDI (Foreign Direct Investment) in excess of INR 50 billion (approx. $775 million) shall be forwarded to the Economic Relations Committee of the Cabinet.


  1. Final Improvement
  • Once the plan has been finalized in all respects, it will be accepted within 8-10 weeks.


·         Funds received from a foreign entity

·         Allotment of shares

·         From FC-GPR (SMF)

Documents for Type FC-GPR (Foreign Currency-Gross Provisional Return)

  1. Certificate of CS
  2. Statement by the Approved Representative of the Indian Company / LLP
  3. Pre and post shareholding trends in the Indian business
  4. Copy of the approval of the Government (if applicable)
  5. Copy of the order of the High Court concerning the merger/demerger/amalgamation scheme (if applicable)
  6. RBI acceptance of the sum of the reimbursement in view of the sum of the grant (if applicable)
  7. Certification of Valuation
  8. Letter of acceptance (if not complying with the criteria – if applicable)
  9. Specific RBI approvals for the issuance of equity securities against funds payable to a foreign investor
  10. FIRC declaration / Debit declaration
  11. Know your Customer (KYC)
  12. Resolution of the Board


  • Asset out in the RBI Notice on "Financial Investment in India-Reporting in Single Master Form" of 7 June 2018, all current reporting systems for different forms of financial investment in India are now issued under the Single Master Form (SMF) necessary to be filed online.
  • As per the RBI Notice, ARF and Foreign Currency- GPR are combined into a single updated Foreign Currency-GPR (SMF). All new filings for the Foreign Currency-GPR (SMF) form must be rendered in a single master form only.


What's Your Reaction?