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Govt liberal FDI policies attract investments and boost SMEs

Tags: fdi, sme, investments, world bank, unctad, small medium entreprises

January 30, 2014 | COMMENTS ( 0 )

Govt liberal FDI policies attract investments and boost SMEs

India which has received over $300 billion in FDI since 2000 is rated consistently among the world's top three destinations by global bodies such as the World Bank and UNCTAD because of "liberal foreign investment policies", the government said.



Since 2000, the country has received total foreign direct investment (FDI) of $306.88 billion.

 

Recently, the government had relaxed the FDI policy in sectors such as petroleum and natural gas; commodity exchanges; power exchanges; stock exchanges; asset reconstruction companies; single brand product retail trading; telecom and courier services.

 

"The result of the liberal foreign investment policies is that India has been consistently rated amongst the top three investment destinations globally by all international bodies including World Bank, UNCTAD," an official statement said.



It said that the country's policy has been progressively liberalised to make the investment regime more investor friendly. Further, on FDI in retail it said that consumers gains from organised retail on multiple counts.

 

"Farmers too have benefited significantly from the option of direct sales to organised retailers. The profit realisation for farmers selling directly to organised retailers is about 60 per cent higher than that received from selling in the mandi," it added.

 

It added that small manufacturers will benefit from the norm of 30 per cent mandatory sourcing from the small units.

 

"They will also derive the benefits of technology upgradation, which will provide a fillip to productivity and local value-addition, thereby raising the profitability and earnings of the small manufacturer," it said.

 

The sourcing condition will also enable the small enterprises to get integrated with global retail chains, thereby enhancing capacity to export products from India. It said that price stabilisation and inflation control could be achieved through direct buying from farmers, improving supply chain inefficiencies, improved storage capabilities, better quality and safety standards.

 

Meanwhile an UNCTAD report said that FDI flows into India grew 17 per cent in 2013 to $28 billion despite unexpected capital outflows in the middle of the year.

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