Trade & Export Policy and External Sector

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Last updated: Jan, 2014

Introduction

India was rated as the most favoured investment destination globally in 2013. During October 2013, foreign institutional investors (FIIs) invested more than Rs 12,100 crore (US$ 1.95 billion) in the Indian equity market.

The Indian economy has inherent strengths which give it resilience from external pressures and the series of steps taken by the Government both on the fiscal and current account front have yielded positive results, said Mr Anand Sharma, Union Minister for Commerce and Industry, Government of India.

With a focus on the Jawaharlal Nehru National Solar Mission (JNNSM) – Phase 1, the latest World Bank report highlighted that India is well poised to become a global leader in the development of solar power. India has also emerged amongst the lowest cost destinations for grid-connected solar Photovoltaic (PV) in the world.

Capital Inflows

India's foreign exchange reserves (Forex) stood at US$ 286,264 million as on November 22, 2013. Foreign currency assets aggregated to US$ 258,665 million and the value of gold reserves stood at US$ 21,227 million, as on November 22, 2013, according to the weekly statistical data released by Reserve Bank of India (RBI).

Indian corporates raised Rs 1.7 trillion (US$ 27.37 billion) through commercial papers (CPs) during the first half of FY14. A total of 169 issuers raised this amount, according to a report by Prime Database.

Remittances by non-resident Indians (NRIs) registered a growth of 27 per cent to touch US$ 6.5 billion during January–September 2013, as compared to 7 per cent growth during the same period last year.

Foreign Direct Investments (FDI)

The total amount of FDI inflow into India (including equity inflows, ‘re-invested earnings’ and ‘other capital’) from April 2000 to October 2013 stood at US$ 309,012 million, according to data released by Department of Industrial Policy and Promotion (DIPP). The cumulative amount of FDI equity inflows during April 2000 to October 2013 stood at US$ 205,885 million.

The Government of India has allowed 100 per cent FDI under automatic route in storage and warehousing, including warehousing of agricultural products with refrigeration (cold storage).

The Government has also approved 20 FDI proposals amounting to Rs 915.83 crore (US$ 147.48 million), based on the recommendations of Foreign Investment Promotion Board (FIPB).

The Indian metallurgical sector attracted the maximum investment commitment, out of 38 sectors tracked by DIPP during January–October 2013 period, with projects worth Rs 1.1 trillion (US$ 17.71 billion); lined up under industrial entrepreneur memorandums signed between industrialists and various State Governments.

Foreign Institutional Investors (FII)

The value of private equity (PE) transactions in India's real estate sector during the first nine months of 2013 increased by 26 per cent to Rs 4,716 crore (US$ 759.42 million), as per a report by real estate consultancy Cushman & Wakefield.

India is witnessing an increased interest from PE investors in the agri-logistics and cold chain industry. PE firms have invested about Rs 940 crore (US$ 151.37 million) in 11 companies in the sector in the past three years, according to Venture Intelligence.

An empowered group of ministers (EGoM) has cleared the mergers and acquisitions (M&A) guidelines for the telecommunication sector, in order to encourage consolidation in the sector.

RBI has allowed foreign retail investors, including NRIs, to invest in rupee-denominated tax-free non-convertible bonds.

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