FDI plans worth Rs 50 L-cr from border nations cleared: Official

NEW DELHI: The government has received foreign direct investment (FDI) proposals worth about Rs one lakh crore since April 2020 from countries sharing land border with India and half of those applications have been cleared so far, a top official said.

The remaining are either pending or withdrawn or rejected by the government. In April 2020, the government came out with a press note under which the Centre made its prior approval mandatory for foreign investments from countries that share land border with India to curb opportunistic takeovers of domestic firms following the COVID-19 pandemic.

Countries which share land borders with India are China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar and Afghanistan. As per that decision, FDI proposals from these countries need government approval for investments in India in any sector. After that press note, “proposals worth about Rs one lakh crore have come in and in that, 50 per cent have been cleared and the rest are either pending or withdrawn or rejected. So it’s not a complete shutdown for that FDI. We are taking a nuanced view on those applications, depending on whether they are adding value to our manufacturing capacities or not,” the government official, who did not wish to be named, said.

The pending proposals are there with security agencies and certain ministries. The number is “very big” for proposals which have been withdrawn, the official added. An inter-ministerial committee has been formed by the government to scrutinise these proposals. The major sectors under which these FDI proposals came included manufacturing of heavy machinery, auto components.

Most of those applications had come from China. Besides, Nepal, Bhutan and Bangladesh too had submitted certain applications. India received $2.5 billion FDI equity from China during the period from April 2000 to September 2023. During the period, India received $0.08 million investments from Bangladesh, $4.51 million from Nepal, $9 million from Myanmar and $2.57 million from Afghanistan. China’s largest automaker SAIC Motor has last month inked a JV with the JSW Group to accelerate the transformation and growth of MG Motor in India.

Meanwhile, FDI from Cayman Islands and Cyprus contracted significantly during April-September this fiscal as the overall inflows declined by 24 per cent, as per the government data. FDI from Cayman Islands dipped 75 pc to $145 million during April-September from $582 million in the same period last fiscal. Similarly, inflows from Cyprus contracted by over 95 per cent to $35 million during the six-month period as against $764 million in April-September 2022-23.