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India’s foreign direct investment to gross domestic product (FDI to GDP) ratio for the financial year 2021-22 stood at 2.7 per cent, government data showed on Wednesday.
The FDI to GDP ratio is the metric which compares a country’s fund inflows as compared to its gross domestic product. The data was shared by the Union Minister of Commerce and Industry Som Parkash in the Lok Sabha.
In 2021-21, the FDI to GDP ratio was at 3.1 per cent. In 2017-18, it was 2.3 per cent.
In reply to a question about whether it is true that the central government has not achieved its foreign direct investments target, the minister replied saying the government does not fix targets for FDI inflows as it is largely a matter of commercial business decisions.
“FDI inflows into a country depends on a host of factors such as availability of natural resources, market size, infrastructure, political and general investment climate as well as the macro-economic stability and investment decision of foreign investors,” he said.
To promote foreign direct investment (FDI), the government has put in place an investor-friendly policy, wherein most sectors, except certain strategically important sectors, are open for 100 per cent FDI under the automatic route.
Further, the policy on FDI is reviewed to ensure that India remains an attractive and investor-friendly destination.
“Changes are made in the policy after having consultations with stakeholders including apex industry chambers, associations, representatives of industries/groups and other organizations. In the recent past, reforms in the FDI policy have been undertaken in sectors such as Insurance, Petroleum & Natural Gas and Telecom.”
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