21-Dec-2022: India Semiconductor Mission

India Semiconductor Mission (ISM) has been setup as an Independent Business Division within Digital India Corporation. ISM has all the administrative and financial powers and is tasked with the responsibility of catalysing the India Semiconductor ecosystem in manufacturing, packaging and design. ISM has an advisory board consisting of some of the leading global experts in the field of semiconductors. ISM is serving as the nodal agency for efficient, coherent and smooth implementation of the programme for development of semiconductor and manufacturing ecosystem in India.

Objectives of ISM are as under:

1. Formulate a comprehensive long-term strategy for developing sustainable semiconductors and display manufacturing facilities and semiconductor design eco-system in the country in consultation with the Government ministries / departments / agencies, industry, and academia.
2. Facilitate the adoption of secure microelectronics and developing trusted semiconductor supply chain, including raw materials, specialty chemicals, gases, and manufacturing equipment.
3. Enable a multi-fold growth of Indian semiconductor design industry by providing requisite support in the form of Electronic Design Automation (EDA) tools, foundry services and other suitable mechanisms for early-stage startups.
4. Promote and facilitate indigenous Intellectual Property (IP) generation.
5. Encourage, enable and incentivize Transfer of Technologies (ToT).
6. Establish suitable mechanisms to harness economies of scale in Indian semiconductor and display industry.
7. Enable cutting-edge research in semiconductors and display industry including evolutionary and revolutionary technologies through grants, global collaborations and other mechanisms in academia / research institutions, industry, and through establishing Centres of Excellence (CoEs).
8. Enable collaborations and partnership programs with national and international agencies, industries and institutions for catalyzing collaborative research, commercialization and skill development.

ISM has been working as nodal agency for the Schemes approved under Semicon India Programme. The applications were received by ISM and are being appraised by ISM. ISM has also been engaging with various stakeholders of Semiconductors and Display ecosystem to attract the investments in India.

So far, INR 13 crore has been released to ISM.

Government is very focused on its important objective of building the overall semiconductor ecosystem and ensure that, it in-turn catalyses India’s rapidly expanding electronics manufacturing and innovation ecosystem. Government has approved the Semicon India programme with a total outlay of INR 76,000 crore for the development of semiconductor and display manufacturing ecosystem in the country. The programme has further been modified in view of the aggressive incentives offered by countries already having established semiconductor ecosystem and limited number of companies owning the advanced node technologies. The modified programme aims to provide financial support to companies investing in semiconductors, display manufacturing and design ecosystem. This will serve to pave the way for India’s growing presence in the global electronics value chains.

Following four schemes have been introduced under the aforesaid programme:

1. ‘Modified Scheme for setting up of Semiconductor Fabs in India’ for attracting large investments for setting up semiconductor wafer fabrication facilities in the country to strengthen the electronics manufacturing ecosystem and help establish a trusted value chain. The Scheme extends a fiscal support of 50% of the project cost on pari-passu basis for setting up of Silicon CMOS based Semiconductor Fab in India.
2. ‘Modified Scheme for setting up of Display Fabs in India’ for attracting large investments for manufacturing TFT LCD or AMOLED based display panels in the country to strengthen the electronics manufacturing ecosystem. Scheme extends fiscal support of 50% of Project Cost on pari-passu basis for setting up of Display Fabs in India.
3. ‘Modified Scheme for setting up of Compound Semiconductors / Silicon Photonics / Sensors Fab / Discrete Semiconductors Fab and Semiconductor Assembly, Testing, Marking and Packaging (ATMP) / OSAT facilities in India’ shall extends a fiscal support of 50% of the Capital Expenditure on Pari-passu basis for setting up of Compound Semiconductors / Silicon Photonics (SiPh) / Sensors (including MEMS) Fab/ Discrete Semiconductor Fab and Semiconductor ATMP / OSAT facilities in India.
4. ‘Semicon India Future Design: Design Linked Incentive (DLI) Scheme’ offers financial incentives, design infrastructure support across various stages of development and deployment of semiconductor design for Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems & IP Cores and semiconductor linked design. The scheme provides “Product Design Linked Incentive” of up to 50% of the eligible expenditure subject to a ceiling of ₹15 Crore per application and “Deployment Linked Incentive” of 6% to 4% of net sales turnover over 5 years subject to a ceiling of ₹30 Crore per application.

In addition to the above schemes, Government has also approved modernisation of Semi-Conductor Laboratory, Mohali as a brownfield Fab.

9-Dec-2022: Production of Semiconductor Chips

The Government is very focused on its important objective of building the overall semiconductor ecosystem and ensure that, it in-turn catalyses India’s rapidly expanding electronics manufacturing and innovation ecosystem. Government has approved the Semicon India programme with a total outlay of INR 76,000 crore for the development of semiconductor and display manufacturing ecosystem in the country. The programme has further been modified in view of the aggressive incentives offered by countries already having established semiconductor ecosystem and limited number of companies owning the advanced node technologies. The modified programme aims to provide financial support to companies investing in semiconductors, display manufacturing and design ecosystem. This will serve to pave the way for India’s growing presence in the global electronics value chains.

Following four schemes have been introduced under the aforesaid programme:

1. ‘Modified Scheme for setting up of Semiconductor Fabs in India’ for attracting large investments for setting up semiconductor wafer fabrication facilities in the country to strengthen the electronics manufacturing ecosystem and help establish a trusted value chain. The Scheme extends a fiscal support of 50% of the project cost on pari-passu basis for setting up of Silicon CMOS based Semiconductor Fab in India.
2. ‘Modified Scheme for setting up of Display Fabs in India’ for attracting large investments for manufacturing TFT LCD or AMOLED based display panels in the country to strengthen the electronics manufacturing ecosystem. Scheme extends fiscal support of up to 50% of Project Cost on pari-passu basis for setting up of Display Fabs in India.
3. ‘Modified Scheme for setting up of Compound Semiconductors / Silicon Photonics / Sensors Fab / Discrete Semiconductors Fab and Semiconductor Assembly, Testing, Marking and Packaging (ATMP) / OSAT facilities in India’ shall extends a fiscal support of 50% of the Capital Expenditure on Pari-passu basis for setting up of Compound Semiconductors / Silicon Photonics (SiPh) / Sensors (including MEMS) Fab/ Discrete Semiconductor Fab and Semiconductor ATMP / OSAT facilities in India.
4. ‘Semicon India Future Design: Design Linked Incentive (DLI) Scheme’ offers financial incentives, design infrastructure support across various stages of development and deployment of semiconductor design for Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems & IP Cores and semiconductor linked design. The scheme provides “Product Design Linked Incentive” of up to 50% of the eligible expenditure subject to a ceiling of ₹15 Crore per application and “Deployment Linked Incentive” of 6% to 4% of net sales turnover over 5 years subject to a ceiling of ₹30 Crore per application.

In addition to the above schemes, Government has also approved modernisation of Semi-Conductor Laboratory, Mohali as a brownfield Fab.

23-Mar-2022: India Semiconductor Mission

Government is focused on its important objective of building the overall semiconductor ecosystem and ensure that, it in-turn catalyses India’s rapidly expanding electronics manufacturing and innovation ecosystem. This vision of Aatmanirbharta in electronics & semiconductors was given further momentum by the Union Cabinet, chaired by the Hon’ble Prime Minister, approving the Semicon India programme with a total outlay of INR 76,000 crore for the development of semiconductor and display manufacturing ecosystem in our country. The programme aims to provide financial support to companies investing in semiconductors, display manufacturing and design ecosystem. This will serve to pave the way for India’s growing presence in the global electronics value chains.

India Semiconductor Mission (ISM) has been setup as an Independent Business Division within Digital India Corporation having administrative and financial autonomy to formulate and drive India’s long term strategies for developing semiconductors and display manufacturing facilities and semiconductor design ecosystem. Envisioned to be led by global experts in the Semiconductor and Display industry, ISM will serve as the nodal agency for efficient, coherent and smooth implementation of the schemes.

Following four schemes have been introduced under the aforesaid programme:

1. Scheme for setting up of Semiconductor Fabs in India provides fiscal support to eligible applicants for setting up of Semiconductor Fabs which is aimed at attracting large investments for setting up semiconductor wafer fabrication facilities in the country. Following fiscal support has been approved under the scheme:
   • 28nm or Lower - Up to 50% of the Project Cost
   • Above 28 nm to 45nm - Up to 40% of the Project Cost
   • Above 45 nm to 65nm - Up to 30% of the Project Cost
2. Scheme for setting up of Display Fabs in India provides fiscal support to eligible applicants for setting up of Display Fabs which is aimed at attracting large investments for setting up TFT LCD / AMOLED based display fabrication facilities in the country. The Scheme provides fiscal support of up to 50% of Project Cost subject to a ceiling of INR 12,000 crore per Fab.
3. Scheme for setting up of Compound Semiconductors / Silicon Photonics / Sensors Fab and Semiconductor Assembly, Testing, Marking and Packaging (ATMP) / OSAT facilities in India: The Scheme provides a fiscal support of 30% of the Capital Expenditure to the eligible applicants for setting up of Compound Semiconductors / Silicon Photonics (SiPh) / Sensors (including MEMS) Fab and Semiconductor ATMP / OSAT facilities in India.
4. Design Linked Incentive (DLI) Scheme offers financial incentives, design infrastructure support across various stages of development and deployment of semiconductor design for Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems & IP Cores and semiconductor linked design. The scheme provides “Product Design Linked Incentive” of up to 50% of the eligible expenditure subject to a ceiling of ₹15 Crore per application and “Deployment Linked Incentive” of 6% to 4% of net sales turnover over 5 years subject to a ceiling of ₹30 Crore per application.

In addition to the above schemes, Government has also approved modernisation of Semi-Conductor Laboratory, Mohali as a brownfield Fab.

The total fiscal outlay of the proposed schemes is INR 76,000 crore which is fungible across different schemes.

The Vision of ISM is to build a vibrant semiconductor and display design and innovation ecosystem to enable India’s emergence as a global hub for electronics manufacturing and design. India Semiconductor Mission (ISM) is of paramount importance to organize efforts for promoting semiconductors and display industry in a more structured, focused, and comprehensive manner. It will formulate a comprehensive long-term strategy for developing semiconductors & display manufacturing facilities and semiconductor design ecosystem in the country in consultation with Government ministries / departments / agencies, industry, and academia. It will facilitate the adoption of trusted electronics through secure semiconductors and display supply chain, including raw materials, specialty chemicals, gases, and manufacturing equipment. It will enable a multi-fold growth of Indian semiconductor design industry by providing requisite support in the form of Electronic Design Automation (EDA) tools, foundry services and other suitable mechanisms for early-stage startups. It will also promote and facilitate indigenous Intellectual Property (IP) generation and encourage, enable and incentivize Transfer of Technologies (ToT). ISM will also enable collaborations and partnership programs with national and international agencies, industries and institutions for catalyzing collaborative research, commercialization and skill development.

16-Jan-2022: Applications invited under the Design Linked Incentive (DLI) Scheme from domestic semiconductor chip design firms

With an overall vision to create a vibrant ecosystem for Semiconductor Chip Design in the country, the Ministry of Electronics and Information (MeitY) is seeking applications from 100 domestic companies, start-ups and MSMEs under its Design Linked Incentive (DLI) Scheme.

Under the DLI Scheme, which was announced by MeitY in December, financial incentives and design infrastructure support will be extended to domestic companies, startups and MSMEs across various stages of development and deployment of semiconductor design for Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems & IP Cores and semiconductor linked design for over a period of 5 years.

The scheme, which was a part of ₹76,000 crore ($10 billion) package that the government announced in December, aims to nurture at least 20 domestic companies involved in semiconductor design and facilitating them to achieve turnover of more than ₹1500 Crore in the next 5 years.

C-DAC (Centre for Development of Advanced Computing), a scientific society operating under MeitY, will serve as the nodal agency for implementation of the DLI scheme.

The scheme has three components – Chip Design infrastructure support, Product Design Linked Incentive and Deployment Linked Incentive.

Under the Chip Design infrastructure support, C-DAC will setup the India Chip Centre to host the state-of-the-art design infrastructure (viz. EDA Tools, IP Cores and support for MPW (Multi Project Wafer fabrication) & post-silicon validation) and facilitate its access to supported companies.

Under the Product Design Linked Incentive component, a reimbursement of up to 50% of the eligible expenditure subject to a ceiling of ₹15 Crore per application will be provided as fiscal support to the approved applicants who are engaged in semiconductor design.

Under the Deployment Linked Incentive component, an incentive of 6% to 4% of net sales turnover over 5 years subject to a ceiling of ₹30 Crore per application will be provided to approved applicants whose semiconductor design for Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems & IP Cores and semiconductor linked design are deployed in electronic products.

The approved applicants that claim incentives under the scheme will be encouraged to retain their domestic status (i.e., more than 50% of the capital in it is beneficially owned by resident Indian citizens and/ or Indian companies, which are ultimately owned and controlled by resident Indian citizens) for a period of three years after claiming incentives under the scheme.

An applicant must meet the Threshold and Ceiling Limits to be eligible for disbursement of incentives under the Scheme.

A dedicated portal has been made available – www.chips-dli.gov.in - for inviting Online applications from January 1, 2022 to December 31, 2024. The applicants can find the guidelines of the DLI Scheme on the portal and register themselves for availing support under the scheme.

The DLI Scheme will also take a graded and pre-emptive approach to Identify the Products of national priorities and implement strategies for their complete or near complete indigenisation & deployment thereby taking steps towards the import substitution & value addition in strategic & societal sectors.

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16-Dec-2022: Make in India facilitates investment, fosters innovation, helps build best in class infrastructure

'Make in India' is an initiative which was launched on 25th September, 2014 to facilitate investment, foster innovation, build best in class infrastructure, and make India a hub for manufacturing, design, and innovation. It is one of the unique 'Vocal for Local' initiatives that promoted India's manufacturing domain to the world.

'Make in India' initiative has significant achievements and presently focuses on 27 sectors under Make in India 2.0. Department for Promotion of Industry and Internal Trade (DPIIT) coordinates action plans for 15 manufacturing sectors, while Department of Commerce coordinates 12 service sector plans. Investment outreach activities are done through Ministries, State Governments and Indian Missions abroad for enhancing International co-operation and promoting both domestic and foreign investment in the country.

In addition to ongoing schemes of various Departments and Ministries, Government has taken various steps to boost domestic and foreign investments in India. These include the introduction of Goods and Services Tax, reduction in Corporate tax, interventions to improve ease of doing business, FDI policy reforms, measures for reduction in compliance burden, policy measures to boost domestic manufacturing through public procurement orders, Phased Manufacturing Programme (PMP), to name a few.

The series of measures taken by the Government to improve the economic situation and convert the disruption caused by COVID 19 into an opportunity for growth includes Atmanirbhar packages, investment opportunities under National Infrastructure Pipeline (NIP) and National Monetisation Pipeline (NMP), India Industrial Land Bank (IILB), Industrial Park Rating System (IPRS), soft launch of the National Single Window System (NSWS), etc. An institutional mechanism to fast-track investments has been put in place, in the form of Project Development Cells (PDCs) in all concerned Ministries/ Departments of Government of India.

Keeping in view India’s vision of becoming ‘Atmanirbhar’ and to enhance India’s Manufacturing capabilities and Exports, an outlay of INR 1.97 lakh crore (over US$ 26 billion) has been announced in Union Budget 2021-22 for PLI schemes for 14 key sectors of manufacturing, starting from fiscal year (FY) 2021-22. With the announcement of PLI Schemes, significant creation of production, skills, employment, economic growth and exports is expected over the next five years and more.

The reforms taken by Government have resulted in increased Foreign Direct Investment (FDI) inflows in the country. FDI inflows in India stood at US $ 45.15 billion in 2014-2015 and have continuously increased since then, and India registered its highest ever annual FDI inflow of US$ 84.84 billion (provisional figures) in the financial year 2021-22.

As per Economic Survey 2021-22, in spite of Covid related disruptions there is trend of positive overall growth of Gross Value Addition (GVA) in manufacturing sector. The total employment in this sector has increased from 57 million in the year 2017-18 to 62.4 million in the year 2019-20.

The activities under the Make in India initiative are also being undertaken by several Central Government Ministries/ Departments and various State Governments. Ministries formulate action plans, programmes, schemes and policies for the sectors being dealt by them, while States also have their own Schemes for attracting investments.

24-Sep-2022: ‘Make in India’ completes 8 years, annual FDI doubles to USD 83 billion

Make in India, the flagship program of the Government of India that aspires to facilitate investment, foster innovation, enhance skill development, and build best-in-class manufacturing infrastructure, completes 8 years of path-breaking reforms on 25th September 2022.

Launched in 2014 under the dynamic leadership of the Hon’ble Prime Minister Shri Narendra Modi, ‘Make in India’ is transforming the country into a leading global manufacturing and investment destination. The initiative is an open invitation to potential investors and partners across the globe to participate in the growth story of ‘New India’.  Make In India has substantial accomplishments across 27 sectors. These include strategic sectors of manufacturing and services as well.

To attract foreign investments, Government of India has put in place a liberal and transparent policy wherein most sectors are open to FDI under the automatic route. FDI inflows in India stood at US $ 45.15 billion in 2014-2015 and have since consecutively reached record FDI inflows for eight years. The year 2021-22 recorded the highest ever FDI at $83.6 billion. This FDI has come from 101 countries, and invested across 31 UTs and States and 57 sectors in the country. On the back of economic reforms and Ease of Doing Business in recent years, India is on track to attract US$ 100 Bn FDI in the current FY.

Production Linked Incentive (PLI) scheme across 14 key manufacturing sectors, was launched in 2020-21 as a big boost to Make in India initiative. The PLI Scheme incentivises domestic production in strategic growth sectors where India has comparative advantage. This includes strengthening domestic manufacturing, forming resilient supply chains, making Indian industries more competitive and boosting the export potential. PLI Scheme is expected to generate significant gains for production and employment, with benefits extending to the MSME eco-system.

Recognising the importance of semiconductors in the world economy, the Government of India has launched a USD 10 billion incentive scheme to build a semiconductor, display, design ecosystem in India.

To strengthen Make in India initiative, several other measures have been taken by the Government of India. The reform measures include amendments to laws, liberalization of guidelines and regulations, in order to reduce unnecessary compliance burden, bring down cost and enhance the ease of doing business in India. Burdensome compliances to rules and regulations have been reduced through simplification, rationalisation, decriminalization, and digitisation, making it easier to do business in India. Additionally, Labour reforms have brought flexibility in hiring and retrenchment. Quality control orders have been introduced to ensure quality in local manufacturing. Steps to promote manufacturing and investments also include reduction in corporate taxes, public procurement orders and Phased Manufacturing Programme.

To promote local industry by providing them preference in public procurement of Goods, Works and Services, the Public Procurement (Preference to Make in India) Order 2017 was also issued pursuant to Rule 153 (iii) of the General Financial Rules 2017, as an enabling provision.  The policy aims at encouraging domestic manufacturer’s participation in public procurement activities over entities merely importing to trade or assemble items. The policy is applicable to all Ministries or Departments or attached or subordinate Offices or autonomous body controlled by the Government of India and includes Government companies as defined in the Companies Act.

Further, the National Single Window System (NSWS) has been soft-launched in September 2021 to improve the ease-of-doing-business by providing a single digital platform to investors for approvals and clearances. This portal has integrated multiple existing clearance systems of the various Ministries/Departments of Government of India and State Governments to enhance the investor experience.

The Government has also launched programme for multimodal connectivity to manufacturing zones in the country, called the Prime Minister’s GatiShakti programme, which will ensure logistical efficiency in business operations through the creation of infrastructure that improves connectivity. This will enable faster movement of goods and people, enhancing access to markets, hubs, and opportunities, and reducing logistics cost.

The One-District-One-Product (ODOP)initiative is another manifestation of the 'Make in India' vision for facilitating promotion and production of the indigenous products from each district of the country and providing a global platform to the artisans and manufacturers of handloom, handicrafts, textiles, agricultural and processed products, thereby further contributing to the socio-economic growth of various regions of the country.

Prime Minister, Shri Narendra Modi, during his Mann ki Baat broadcast in August 2020, expressed a desire to establish India as a global toy manufacturing hub and to strengthen domestic designing and manufacturing capabilities.

The Toy Industry in India has historically been import dependent. Lack of raw-material, technology, design capability etc. led to huge imports of Toys and its components. In 2018-19, Toys worth USD 371 Mn (Rs. 2960 cr.) were imported into our country.  A large proportion of these toys were unsafe, substandard, counterfeit, and cheap. 

To address the import of low-quality and hazardous toys and to enhance domestic manufacturing of toys, several strategic interventions have been taken by government. Some key initiatives include increase of Basic Custom Duty from 20% to 60%, implementation of Quality Control Order, mandatory sample testing of imported toys, granting more than 850 BIS licenses to domestic toy manufacturers, development of toy clusters etc. Several promotional initiatives including The India Toy Fair 2021, Toycathon 2021, Toy Business League 2022 were conducted to promote indigenous toys to encourage innovation and new-age design to suit global requirements.

Complimented by sincere efforts of domestic toy manufacturers, the growth of Indian Toy industry has been remarkable in less than 2 years despite Covid-19 pandemic.  The import of toys in FY21-22 have reduced by 70% to USD 110 Mn (Rs. 877.8 cr.). There has also been a distinct improvement in quality of toys in domestic market. Simultaneously, the efforts of the industry have led to an export of 326 Mn USD (Rs. 2601.5 cr.) of toys in FY21-22, which is an increase of over 61% over 202 Mn USD (Rs. 1612 cr.) of FY18-19. India’s export of toys registered tremendous growth of 636% in April-August 2022 over the same period in 2013.

There are several trends that mark a shift in Indian manufacturing, which includes increase in domestic value addition & local sourcing, a greater focus on R & D, innovation and sustainability measures.

The Make in India initiative has been striving to ensure that the business ecosystem in the nation is conducive for investors doing business in India and contributing to growth and development of the Nation. This has been done through a range of reforms that has led to increased investment inflows as well as economic growth.

With this initiative at the forefront, the businesses in India are aiming that the products that are 'Made in India' are also ‘Made for the World,’ adhering to global standards of quality.

6-Apr-2022: Make In India

The 'Make in India' initiative was launched on 25th September, 2014 to facilitate investment, foster innovation, build best in class infrastructure, and make India a hub for manufacturing, design, and innovation. It is one of the unique 'Vocal for Local' initiatives that promoted India's manufacturing domain to the world.

'Make in India' initiative has significant achievements and presently focuses on 27 sectors under Make in India 2.0. Department for Promotion of Industry and Internal Trade (DPIIT) coordinates action plans for 15 manufacturing sectors, while Department of Commerce coordinates 12 service sector plans. Investment outreach activities are done through Ministries, State Governments and Indian Missions abroad for enhancing International co-operation and promoting both domestic and foreign investment in the country.

In addition to ongoing schemes of various Departments and Ministries, Government has taken various steps to boost domestic and foreign investments in India. These include the introduction of Goods and Services Tax, reduction in Corporate taxes, financial market reforms, consolidation of public sector banks, enactment of four labour codes, improving ease of doing business, FDI policy reforms, other sectoral reforms, reduction in compliance burden, policy measures to boost domestic manufacturing through public procurement orders, Phased Manufacturing Programme (PMP), to name a few.

The series of measures taken by the Government to improve the economic situation and convert the disruption caused by COVID 19 into an opportunity for growth includes Atmanirbhar packages, introduction of Production Linked Incentive (PLI) Scheme in various Ministries, National Infrastructure Pipeline (NIP), National Monetisation Pipeline (NMP), Public Sector Enterprise Policy, India Industrial Land Bank (IILB), Industrial Park Rating System (IPRS), soft launch of the National Single Window System (NSWS), etc.

Keeping in view India’s vision of becoming ‘Atmanirbhar’ and to enhance India’s Manufacturing capabilities and Exports, an outlay of INR 1.97 lakh crore (over US$ 26 billion) has been announced in Union Budget 2021-22 for PLI schemes for 14 key sectors of manufacturing, starting from fiscal year (FY) 2021-22. With the announcement of PLI Schemes, significant creation of production, employment, economic growth and exports is expected over the next five years and more.

The reforms taken by Government have resulted in increased Foreign Direct Investment (FDI) inflows in the country. FDI policy provisions have been progressively liberalized and simplified across various sectors in the recent past to make India an attractive investment destination. FDI inflows in India stood at US $ 45.15 billion in 2014-2015 and have continuously increased since then. India registered its highest ever annual FDI inflow of US$ 81.97 billion (provisional figures) in the financial year 2020-21. These trends in India’s FDI are an endorsement of its status as a preferred investment destination amongst global investors.

In the last seven financial years (2014-21), India has received FDI inflow worth US$ 440.27 billion which is nearly 58 percent of the FDI reported in the last 21 years (US$ 763.83 billion).

As per Economic Survey 2021-22, in spite of Covid related disruptions there is trend of positive overall growth of Gross Value Addition (GVA) in manufacturing sector. The total employment in this sector has increased from 57 million in the year 2017-18 to 62.4 million in the year 2019-20.

The activities under Make in India initiative are also being undertaken by several Central Government Ministries/Departments and various State Governments. Ministries formulate action plans, programmes, schemes and policies for the sectors being dealt by them, while States also have their own schemes for attracting investments.

16-Mar-2022: Make in India

'Make in India' is an initiative which was launched on 25th September, 2014 to facilitate investment, foster innovation, build best in class infrastructure, and make India a hub for manufacturing, design, and innovation. It is one of the unique 'Vocal for Local' initiatives that promoted India's manufacturing domain to the world.

'Make in India' initiative has significant achievements and presently focuses on 27 sectors under Make in India 2.0. Department for Promotion of Industry and Internal Trade (DPIIT) coordinates action plans for 15 manufacturing sectors, while Department of Commerce coordinates 12 service sector plans. Investment outreach activities are done through Ministries, State Governments and Indian Missions abroad for enhancing international cooperation and promoting both domestic and foreign investment in the country.

In addition to ongoing schemes of various Departments and Ministries, Government has taken various steps to boost domestic and foreign investments in India. These include the introduction of Goods and Services Tax, reduction in Corporate taxes, financial market reforms, consolidation of public sector banks, enactment of four labour codes, improving ease of doing business, FDI policy reforms, other sectoral reforms, reduction in compliance burden, policy measures to boost domestic manufacturing through public procurement orders, Phased Manufacturing Programme (PMP), to name a few.

The series of measures taken by the Government to improve the economic situation and convert the disruption caused by COVID 19 into an opportunity for growth includes Atmanirbhar packages, introduction of Production Linked Incentive (PLI) Scheme in various Ministries, investment opportunities under National Infrastructure Pipeline (NIP) and National Monetisation Pipeline (NMP), India Industrial Land Bank (IILB), Industrial Park Rating System (IPRS), soft launch of the National Single Window System (NSWS), etc.

In addition, Government of India is developing various Industrial Corridor Projects as part of National Industrial Corridor Programme which is aimed at development of greenfield industrial regions/nodes which can compete with the best manufacturing and investment destinations in the world. GoI has accorded approval for development of 11 Industrial corridors (32 projects) in four Phases. Under Delhi Mumbai Industrial Corridor (DMIC) Project, 04 greenfield industrial nodes have been developed under Delhi Mumbai Industrial Corridor (DMIC).

Further, PM GatiShakti National Master Plan provides a transformative approach for ensuring multimodal connectivity to various economic zones. Minimizing disruptions, ensuring quick completion of works with cost efficiency are the guiding principles for the development of infrastructure as per the National Master Plan. Boost in economic growth, attracting investments and enhancement of country’s global competitiveness, are some of the expected outcomes.

The reforms taken by Government have resulted in increased Foreign Direct Investment (FDI) inflows in the country. FDI inflows in India stood at US $ 45.15 billion in 2014-2015 and have continuously increased since then, and India registered its highest ever annual FDI inflow of US$ 81.97 billion (provisional figures) in the financial year 2020-21.

Keeping in view India’s vision of becoming ‘Atmanirbhar’ and to enhance India’s Manufacturing capabilities and Exports, an outlay of INR 1.97 lakh crore (over US$ 26 billion) has been announced in Union Budget 2021-22 for PLI schemes for 14 key sectors of manufacturing, starting from fiscal year (FY) 2021-22. With the announcement of PLI Schemes, significant creation of production, skills, employment, economic growth and exports is expected over the next five years and more.

The activities under the Make in India initiative are also being undertaken by several Central Government Ministries/ Departments and various State Governments. Ministries formulate action plans, programmes, schemes and policies for the sectors being dealt by them, while States also have their own Schemes for attracting investments.

8-Dec-2021: ‘Make In India’ Project

‘Make in India' is an initiative which was launched on 25th September, 2014 to facilitate investment, foster innovation, build best in class infrastructure, and make India a hub for manufacturing, design, and innovation. It is one of the unique 'Vocal for Local' initiatives that promoted India's manufacturing domain to the world. The ‘Make in India’ initiative is not a State/ district/ city / area specific initiative, rather it is being implemented all over the country.

'Make in India' initiative has significant achievements and presently focuses on 27 sectors under Make in India 2.0. Department for Promotion of Industry and Internal Trade (DPIIT) is coordinating action plans for 15 manufacturing sectors, while Department of Commerce is coordinating 12 service sector plans.

The Government of India is making continuous efforts under Investment Facilitation, including financial assistance to Invest India, for implementation of Make in India action plans to identify potential investors. Support is being provided to Indian Missions abroad and State Governments for organizing events, summits, road-shows and other promotional activities to attract investment in the country under the Make in India banner.

Investment Outreach activities are being carried out for enhancing International co-operation for promoting Foreign Direct Investment (FDI) and to improve Ease of Doing Business (EoDB) in the country. Steps taken to improve Ease of Doing Business include simplification and rationalization of existing processes. As a result of the measures taken to improve the country’s investment climate, India jumped to 63rd place in World Bank’s Ease of Doing Business ranking as per World Bank’s Doing Business Report (DBR) 2020 from a rank of 142 in 2014.

DPIIT, in consultation with the State Governments, has also started a comprehensive reform exercise in States and UTs in December 2014. Under Business Reforms Action Plan (BRAP), all States/UTs in the country are ranked on the basis of reforms implemented by them on designated parameters. This exercise has helped in improving business environment across States.

Measures taken by the Government on FDI Policy reforms have resulted in increased FDI inflows in the country year after year. India registered its highest ever annual FDI inflow of US$ 81.97 billion (provisional figures) in the financial year 2020-21 despite the COVID related disruptions. These trends in India's FDI are an endorsement of its status as a preferred investment destination amongst global investors. In the last seven financial years (2014-21), India has received FDI inflow worth US$ 440.27 billion which is nearly 58 percent of the FDI reported in the last 21 years (US$ 763.83 billion).

Government has taken various other steps in addition to ongoing schemes to boost domestic and foreign investments in India. These include improving the Ease of Doing Business, Reduction in Compliance Burden, the National Infrastructure Pipeline, Reduction in Corporate Tax, Easing liquidity problems of NBFCs and Banks, Policy measures to boost domestic manufacturing through Public Procurement Orders, Phased Manufacturing Programme (PMP), Schemes for Production Linked Incentives (PLI) of various Ministries, India Industrial Land Bank, Industrial Park Rating System etc. With the announcement of PLI Schemes, significant creation of production, employment, and economic growth is expected over the next 5 years and more.

Besides the above, activities under the initiative are also undertaken through schemes/ programmes, by several Central Government Ministries/ Departments and various State Governments from time to time. The details of these measures are not centrally maintained by Department for Promotion of Industry and Internal Trade (DPIIT).

19-Jul-2021: Production of Defence Equipment in ‘Make-In-India’ Programme

‘Make in India’ is implemented in defence sector through various policy initiatives which promotes indigenous design, development and manufacture of defence items.  As per Defence Acquisition Procedure (DAP), priority has been accorded to capital acquisition through ‘Buy (Indian-IDDM)’, ‘Buy (Indian)’, ‘Buy and Make (Indian)’, ‘Buy and Make’ ‘Strategic Partnership Model’ or ‘Make’ categories over Buy (Global) category.  In the last three financial years i.e. from 2018-19 to 2020-2021, Government has accorded Acceptance of Necessity (AoN) to 119 Defence proposals, worth Rs.2,15,690 Crore approximately, under the various categories of Capital Acquisition, which promotes domestic manufacturing as per DAP.

Many significant projects including 155mm Artillery Gun system ‘Dhanush’, Bridge Laying Tank, Thermal Imaging Sight Mark-II for T-72 tank, Light Combat Aircraft ‘Tejas’, ‘Akash’ Surface to Air Missile system, Submarine ‘INS Kalvari’, ‘INS Chennai’, Anti-Submarine Warfare Corvette (ASWC), Arjun Armoured Repair and Recovery Vehicle, Landing craft utility, etc. have been produced in the country under ‘Make in India’ initiative of the Government in last few years.

Further, production of indigenous defence equipment and innovations therein is a dynamic process and their development is decided on the basis of operational requirements of the Armed Forces.  So, no specific timeline can be assigned in such cases.  Procurement of defence equipment is undertaken from various domestic as well as foreign vendors, based on threat perception, operational challenges and technological changes and to keep the Armed Forces in a state of readiness to face the security challenges.

24-Mar-2021: Make in India

Make in India initiative was launched on September 25, 2014 with the objective of facilitating investment, fostering innovation, building best in class manufacturing infrastructure, making it easy to do business and enhancing skill development. The initiative is further aimed at creating a conducive environment for investment, modern and efficient infrastructure, opening up new sectors for foreign investment and forging a partnership between government and industry through positive mindset.

Since its launch, Make in India initiative has made significant achievements and presently focuses on 27 sectors under Make in India 2.0. Department for Promotion of Industry and Internal Trade is coordinating action plans for manufacturing sectors, while Department of Commerce is coordinating service sectors.

The Government of India is making continuous efforts under Investment Facilitation for implementation of Make in India action plans to identify potential investors. Support is being provided to Indian Missions abroad and State Governments for organising events, summits, road-shows and other promotional activities to attract investment in the country under the Make in India banner. Investment Outreach activities are being carried out for enhancing International co-operation for promoting FDI and improve Ease of Doing Business in the country.

India has registered its highest ever annual FDI Inflow of US $74.39 billion (provisional figure) during the last financial year 2019-20 as compared to US $ 45.15 billion in 2014-2015. In the last six financial years (2014-20), India has received FDI inflow worth US$ 358.30 billion which is 53 percent of the FDI reported in the last 20 years (US$ 681.87 billion).

Steps taken to improve Ease of Doing Business include simplification and rationalisation of existing processes. As a result of the measures taken to improve the country’s investment climate, India jumped to 63rd place in World Bank’s Ease of Doing Business ranking as per World Bank’s Doing Business Report (DBR) 2020. This is driven by reforms in the areas of Starting a Business, Paying Taxes, Trading Across Borders, and Resolving Insolvency.

Recently, Government has taken various steps in addition to ongoing schemes to boost domestic and foreign investments in India. These include the National Infrastructure Pipeline, Reduction in Corporate Tax, easing liquidity problems of NBFCs and Banks, policy measures to boost domestic manufacturing. Government of India has also promoted domestic manufacturing of goods through public procurement orders, Phased Manufacturing Programme (PMP), Schemes for Production Linked Incentives of various Ministries.

Further, with a view to support, facilitate and provide investor friendly ecosystem to investors investing in India, the Union Cabinet on 03rd June, 2020 has approved constitution of an Empowered Group of Secretaries (EGoS), and also Project Development Cells (PDCs) in all concerned Ministries/ Departments to fast-track investments in coordination between the Central Government and State Governments, and thereby grow the pipeline of investible projects in India to increase domestic investments and FDI inflow.

15-Mar-2021: Equipment Manufactured Under 'Make-In-India' Programme

‘Make in India’ initiative in defence sector is implemented through various policy initiatives which promotes indigenous design, development and manufacture of defence items. These initiatives, inter-alia, include priority to procurement of capital items from domestic sources under Defence Acquisition Procedure (DAP) 2020; notification of ‘Negative list’ of 101 items for which there would be an embargo on the import beyond the timeline indicated against them; simplification of Industrial licensing process; liberalization of FDI policy; simplification of Make Procedure; launch of Innovations for Defence Excellence (iDEX) scheme; and implementation of “Public Procurement (Preference to Make in India), Order 2017.

During the last two financial years i.e. from 2018-19 to 2019-2020 and the current financial year 2020-21( till December 2020), the Government has accorded Acceptance of Necessity (AoN) to 112 Defence proposals, worth Rs. 1,99,860 Crore approximately, under the various categories of Capital Acquisition, which promotes domestic manufacturing as per the Defence Acquisition/Procurement Procedure.

Many significant projects including 155mm Artillery Gun system ‘Dhanush’, Bridge Laying Tank, Thermal Imaging Sight Mark-II  for T-72 tank, Light Combat Aircraft ‘Tejas’, ‘Akash’ Surface to Air Missile system, Submarine ‘INS Kalvari’, ‘INS Chennai’, Anti-Submarine Warfare Corvette (ASWC), Arjun Armoured Repair and Recovery Vehicle, Landing craft utility, etc. have been produced in the country under ‘Make in India’ initiative of the Government in last few years.

Based on the export Authorisations/ Licenses issued by Department of Defence Production and actual exports done by Ordnance Factory Board (OFB) & Defence Public Sector Undertakings (DPSUs) and private industries, some of major items exported in the past few years, are Fast Patrol Vessels, Coastal Surveillance System (CSS), Light Weight Torpedoes, Light Weight Torpedo Launcher and Parts, Do-228 Aircraft, Wheeled Infantry Carrier, Light Specialist Vehicle, Mine Protected Vehicle, Passive Night Sights, Battle Field Surveillance Radar Extended Range, Integrated Anti-Submarine Warfare, Advanced Weapons Simulator, Personal Protective items, 155mm Artillery Gun Ammunition, Small Arms and Ammunitions, Weapon locating Radars, Identification of Friend or Foe (IFF) –Interrogator etc. Considering the strategic sensitivity of the matter and in the interest of national security, the country-wise details of exports cannot be divulged.

The contracts for various capital acquisition requirements of the Government in the Defence Sector are awarded to domestic, public & private sector companies including those situated in State of Uttar Pradesh, as per the extant provisions prescribed in Defence Acquisition Procedure. In addition, the OFB &DPSUs  place orders on Indian vendors including those situated in Uttar Pradesh for supply of various items, components etc. as per their requirements.  Moreover, the Government has established a Defence Industrial Corridor in the State of Uttar Pradesh with 6 nodes at Aligarh, Agra, Chitrakoot, Jhansi, Lucknow and Kanpur to develop defence manufacturing ecosystem and promote indigenous manufacturing.

3-Feb-2021: Make in India Initiative

Make in India initiative was launched by the Government on September 25, 2014 with the objective of facilitating investment, fostering innovation, building the best in class manufacturing infrastructure, making it easy to do business and enhancing skill development.  The initiative is further aimed at creating a conducive environment for investment, modern and efficient infrastructure, opening up new sectors for foreign investment and forging a partnership between government and industry through positive mind-set.

‘Make in India’ initiative in defence sector is implemented through various policy initiatives which promotes indigenous design, development and manufacture of defence items. These initiatives, inter-alia, include priority to procurement of capital items from domestic sources under Defence Acquisition Procedure (DAP) 2020; notification of ‘Negative list’ of 101 items for which there would be an embargo on the import beyond the timeline indicated against them; simplification of Industrial licensing process; liberalization of FDI policy; simplification of Make Procedure; launch of Innovations for Defence Excellence (iDEX) scheme; and implementation of “Public Procurement (Preference to Make in India), Order 2017.

In the last three financial years i.e. from 2017-18 to 2019-2020, Government has accorded Acceptance of Necessity (AoN) to 123 Defence proposals, worth Rs. 169,750 Crore approximately, under the various categories of Capital Acquisition, which promotes domestic manufacturing as per the Defence Acquisition Procedure.

Many significant projects including 155mm Artillery Gun system ‘Dhanush’, Bridge Laying Tank, Thermal Imaging Sight Mark-II for T-72 tank, Light Combat Aircraft ‘Tejas’, ‘Akash’ Surface to Air Missile system, Attack Submarine ‘INS Kalvari’, ‘INS Chennai’, Arjun Armoured Repair and Recovery Vehicle, Medium Bullet Proof vehicle etc, have been produced in the country under ‘Make in India’ of the Government in the last few years.

Based on the Authorisation/License issued by Department of Defence Production and actual exports done by Ordnance Factory Board (OFB) & Defence Public Sector Undertakings (DPSUs), some of major items exported in the past few years are Fast Patrol Vessels, Coastal Surveillance System (CSS), Light Weight Torpedoes, Light Weight Torpedo  Launcher and Parts, Do-228 Aircraft,  Wheeled  Infantry  Carrier, Light Specialist Vehicle, Mine Protected Vehicle, Passive Night Sights, Battle Field Surveillance Radar Extended Range, Integrated Anti-Submarine Warfare, Advanced Weapons Simulator, Personal Protective items, 155mm Artillery Gun Ammunition, Small Arms and Ammunitions, Weapon locating Radars, Identification of Friend or Foe (IFF) –Interrogator etc. Considering the strategic sensitivity of the matter, in the interest of national security, the country-wise details of exports cannot be divulged. 

The contracts for various capital acquisition requirements of the Government in the Defence Sector are awarded to domestic, public & private sector companies including those situated in State of Tamil Nadu, as per the extant provisions prescribed in Defence Acquisition Procedure. In addition, the OFB & DPSUs  place orders on Indian vendors including those situated in Tamil Nadu for supply of various items, components etc. as per their requirements.  A decision has been taken to set up a Defence Industrial Corridor in the State of Tamil Nadu with 5 nodes at Chennai, Coimbatore, Hosur, Salem and Tiruchirappalli to develop defence manufacturing ecosystem and promote indigenous manufacturing.

18-Mar-2020: FDI for Make in India

Make in India initiative was launched along with action plans prepared for various sectors with the objective of facilitating investment, fostering innovation, building best in class manufacturing infrastructure, making it easy to do business and enhancing skill development. The initiative is further aimed at creating a conducive environment for investment, modern and efficient infrastructure, opening up new sectors for foreign investment and forging a partnership between government and industry through positive mindset.

Make in India initiative has been reviewed and is now focusing on 27 sectors under Make in India 2.0. List of 27 sectors under Make in India 2.0 is annexed as annexure-I. Department for Promotion of Industry and Internal Trade is coordinating action plans for 15 manufacturing sectors while Department of Commerce is coordinating 12 service sectors.

The Government of India is making continuous efforts under Investment Facilitation including financial assistance to Invest India and for implementation of Make in India action plans to identify potential investors. Support is being provided to Indian Missions abroad and State Governments for organising events, summits, road-shows and other promotional activities to attract investment in the country under the Make in India banner. Investment Outreach activities are being carried out for enhancing International co-operation for promoting FDI and improve Ease of Doing Business in the country.

Further, Government has put in place a liberal and transparent policy for Foreign Direct Investment (FDI), wherein most of the sectors are open for FDI under the automatic route. Further, FDI Policy reforms made after 2014-15 in sectors related to Make in India is annexed as Annexure-II.

Representations have been received in this Department alleging that some e-commerce platforms are engaged in predatory pricing and are providing excessive discounts. The extant Foreign Direct Investment (FDI) policy on e-commerce sector, inter-alia, specifies that e-commerce marketplaces will not directly or indirectly influence the sale price of goods or services and shall maintain a  level playing field. e-Commerce companies having foreign investment can operate only a marketplace model and there are restrictions on the inventory based model of e-Commerce. In order to clarify the same, Department for Promotion of Industry and Internal Trade (DPIIT), vide Press Note 3 of 2016, issued guidelines for FDI in e-Commerce on 29 March 2016.

However, allegations were made against e-Commerce companies that the marketplaces were violating the norms laid down in Press Note 3 of 2016. With a view to clarify the already existing policy framework, Press Note 2 of 2018 was issued by DPIIT on 26 December 2018 to provide further clarification on FDI Policy in relation to e-Commerce companies. Through the latest Press Note 2 of 2018, Government has reiterated the policy provisions to ensure better implementation of the policy in letter and spirit. Further, Clause (ix) of Press Note 2 of 2018, stipulates that e-commerce entities providing marketplace will not directly or indirectly influence the sale price of goods or services and shall maintain level playing field. Services should be provided by e-commerce marketplace entity or other entities in which e-commerce marketplace entity has direct or indirect equity participation or common control, to vendors on the platform at arm's length and in a fair and non-discriminatory manner. Such services will include but not limited to fulfilment, logistics, warehousing, advertisement/ marketing, payments, financing, etc. Cash back provided by group companies of marketplace entity to buyers shall be fair and non-discriminatory. For the purposes of this clause, provision of services to any vendor on such terms which are not made available to other vendors in similar circumstances will be deemed unfair and discriminatory. Further, if any violation is reported necessary action may be taken by the competent authority.

Further, Competition Commission of India in one case (i.e. Case No. 40/2019) filed against Flipkart Internet Pvt. Ltd. And Amazon Seller Services Private Ltd., vide order dated 13.01.2020, passed under section 26 (1) of the Competition Act 2002, has directed the DG to conduct an investigation and submit its investigation report. The said order passed by the Commission was impugned by Amazon Seller Services Pvt. Ltd. Before the Hon'ble High Court of Karnataka in W.P. No 3363/2020 and the Hon’ble High Court vide order dated 14.02.2020 has stayed the operation of the order of the Commission

ANNEXURE I

List of 27 Sectors under Make in India initiative 2.0

(Manufacturing Sectors)

1. Aerospace and Defence
2. Automotive and Auto Components
3. Pharmaceuticals and Medical Devices
4. Bio-Technology
5. Capital Goods
6. Textile and Apparels
7. Chemicals and Petro chemicals
8. Electronics System Design and Manufacturing (ESDM)
9. Leather & Footwear
10. Food Processing
11. Gems and Jewellery
12. Shipping
13. Railways
14. Construction
15. New and Renewable Energy

(Service Sectors)

1. Information Technology & Information Technology enabled Services (IT &ITeS)
2. Tourism and Hospitality Services
3. Medical Value Travel
4. Transport and Logistics Services
5. Accounting and Finance Services
6. Audio Visual Services
7. Legal Services
8. Communication Services
9. Construction and Related Engineering Services
10. Environmental Services
11. Financial Services
12. Education Services

ANNEXURE-II

FDI Policy Reforms in sectors listed under Make in India since May 2014-15

Defence sector: India incurs huge expenditure on imports of defence equipment as the domestic defence industry has not been able to meet the expectations of the present times. The sector is capital intensive and requires advance technologies. Earlier FDI regime permitted 49% FDI participation in the equity of a company under automatic route.  FDI above 49% was permitted through Government approval on case to case basis, wherever it is likely to result in access to modern and ‘state-of-art’ technology in the country. In this regard, the following changes have inter-alia been brought in the FDI policy on this sector:

1. Foreign investment beyond 49% has now been permitted through government approval route, in cases resulting in access to modern technology in the country or for other reasons to be recorded.
2. FDI limit for defence sector has also been made applicable to Manufacturing of Small Arms and Ammunitions covered under Arms Act 1959.

Pharmaceutical: With the objective of making the sector more attractive to foreign investors, 74% FDI under automatic route has been permitted in brownfield pharmaceuticals. FDI beyond 74% is allowed through government approval route. ‘Non-compete’ clause would not be allowed in automatic or government approval route except in special circumstances with the approval of the Foreign Investment Promotion Board.

FDI in brownfield pharmaceuticals, under both automatic and government approval routes, is subject to compliance of following conditions:

1. The production level of National List of Essential Medicines (NLEM) drugs and/or consumables and their supply to the domestic market at the time of induction of FDI, being maintained over the next five years at an absolute quantitative level. The benchmark for this level would be decided with reference to the level of production of NLEM drugs and/or consumables in the three financial years, immediately preceding the year of induction of FDI.  Of these, the highest level of production in any of these three years would be taken as the level.
2. R&D expenses being maintained in value terms for 5 years at an absolute quantitative level at the time of induction of FDI.  The benchmark for this level would be decided with reference to the highest level of R&D expenses which has been incurred in any of the three financial years immediately preceding the year of induction of FDI
3. The administrative Ministry will be provided complete information pertaining to the transfer of technology, if any, along with induction of foreign investment into the investee company.

Medical Devices: India has achieved an eminent global position in pharma sector. However, same has not been replicated in the medical devices industry. The country has huge pool of scientists and engineers who have potential to take medical device industry to a very high level. Domestic capital market is not able to provide much needed investment in the sector. The government has therefore permitted FDI up to 100% under the automatic route for manufacturing of medical devices, without any distinction of greenfield or brownfield and such FDI will not be subjected to other conditions of the FDI policy on the pharmaceutical sector.

Food Product Retail Trading: 100% FDI under government approval route has been permitted for trading, including through e-commerce, in respect food products manufactured and/or produced in India. This will benefit farmers, give impetus to food processing industry and create vast employment opportunities.

Rail Infrastructure: The modernization of Railways requires very large amount of capital investment.  This makes foreign investment imperative in rail infrastructure especially in highly capital and technology intensive areas like suburban corridors, high speed train systems, train sets, railway rolling stock including locomotives/coaches, railway electrification, signaling systems dedicated freight line projects. Accordingly the Government with view to attract foreign investment in the sector has opened following activities of Rail infrastructure to 100% under automatic route:

Construction, operation and maintenance of (i)  Suburban corridor projects through PPP, (ii)  High speed train projects, (iii) Dedicated freight lines, (iv)  Rolling stock including train sets, and locomotives/coaches manufacturing and maintenance facilities, (v) Railway Electrification, (vi) Signaling systems, (vii) Freight terminals, (viii) Passenger terminals, (ix)  Infrastructure in industrial park pertaining to railway line/sidings including electrified railway lines and connectivity to main railway line and (x)  Mass Rapid Transport Systems.

However, FDI beyond 49% of the equity of the investee company in sensitive areas from security point of view, will be brought before the Cabinet Committee on Security (CCS) for consideration on a case to case basis.

Construction Development sector: Investment in the construction development sector remains a priority of the Government as it results in infrastructure creation; employment generation from unskilled workers to engineers, architects, designers as well as financial and other supporting services. FDI policy on Construction Development permits 100% foreign investment under automatic route subject to certain conditions. In order to liberalize and bring pragmatism in the policy so as to attract more foreign investment in the country not only in large infrastructure projects but also in held-up and smaller projects following amendments have introduced in the FDI policy on the sector:

1. Removal of conditions of area restriction of floor area of 20,000 sq. mtrs in construction development projects and minimum capitalization of US $ 5 million to be brought in within the period of six months of the commencement of business.
2. Exit and repatriation of foreign investment is now permitted after a lock-in-period of three years. Transfer of stake from one non-resident to another non-resident, without repatriation of investment is also neither to be subjected to any lock-in period nor to any government approval.
3. Exit is permitted at any time if project or trunk infrastructure is completed before the lock-in period.
4. 100% FDI under automatic route is permitted in completed projects for operation and management of townships, malls/ shopping complexes and business centres.
5. It has been clarified that ‘real-estate broking service’ does not amount to real estate business and is therefore, eligible for 100% FDI under automatic route.

Civil Aviation Sector: Foreign equity cap of activities of Non-Scheduled Air Transport Service, Ground Handling Services have been increased from 74% to 100% under the automatic route. With a view to aid in modernization of the existing airports to establish a high standard and help ease the pressure on the existing airports, 100% FDI under automatic route has been allowed in Brownfield Airport projects.

FDI limit for Scheduled Air Transport Service/ Domestic Scheduled Passenger Airline and regional Air Transport Service raised to 100%, with FDI upto 49% permitted under automatic route and FDI beyond 49% through Government approval. For NRIs, 100% FDI will continue to be allowed under automatic route. However, foreign airlines would continue to be allowed to invest in capital of Indian companies operating scheduled and nonscheduled air­ transport services up to the limit of 49% of their paid up capital and subject to the laid down conditions in the existing policy.

As per the earlier policy, foreign airlines were allowed to invest under Government approval route in the capital of Indian companies operating scheduled and nonscheduled air transport services, up to the limit of 49% of their paid-up capital. However, this provision was not applicable to M/s Air India Ltd., thereby implying that foreign airlines could not invest in Air India. Now, foreign investment(s) in Air India has been allowed, including that of foreign airline(s), up to 49% either directly or indirectly. Substantial ownership and effective control of Air India shall continue to be vested in Indian Nationals.

Further, Union Cabinet in its meeting on March 4, 2020; permitted foreign investment(s) in M/s Air India ltd. By NRIs, who are Indian Nationals, upto 100% under automatic route.

Manufacturing Sector: In order to provide boost to the manufacturing sector and give impetus to the ‘Make in India’ initiative, the Government has permitted a manufacturer to sell its product through wholesale and/or retail, including through e-commerce under automatic route.

Contract Manufacturing: In order to provide clarity on contract manufacturing, it has been decided to allow 100% FDI under automatic route in contract manufacturing in India as well. Subject to the provisions of the FDI policy, foreign investment in ‘manufacturing’ sector is under automatic route. Manufacturing activities may be conducted either by the investee entity or through contract manufacturing in India under a legally tenable contract, whether on Principal to Principal or Principal to Agent basis.

Other Financial Services: Government has reviewed FDI policy on Other Financial Services and NBFCs to provide that foreign investment in financial services activities regulated by financial sector regulators such as RBI, SEBI, IRDA etc. will be 100% under the automatic route. In financial services, which are not regulated by any financial sector regulator or where only part of the financial service activity is regulated or where there is doubt regarding regulatory oversight, foreign investment upto 100% will be allowed under the government approval route.

Insurance & Pension Sectors: FDI Policy on Insurance sector was reviewed in view of amendment to the Insurance Laws (Amendment) Act 2015 to increase the sectoral cap of foreign investment from 26% to 49%. Further it has been provided that FDI in the sector would be permitted under automatic route. Similar changes have also been brought in the FDI Policy on Pension Sector.

Banking-Private sector: Government introduced full fungibility of foreign investment in Banking-Private sector. Accordingly, FIIs/FPIs/QFIs, following due procedure, can now invest up to sectoral limit of 74%, provided that there is no change of control and management of the investee company.

Insurance Intermediaries: Vide Press Note 1(2020)100% FDI has been permitted in Intermediaries or Insurance Intermediaries including insurance brokers, re-insurance brokers, insurance consultants, corporate agents, third party administrator, Surveyors and Loss Assessors and such other entities, as may be notified by the Insurance Regulatory and Development Authority from time to time.

Digital Media: The extant FDI policy provides for 49% FDI under approval route in Up-linking of ‘News & Current Affairs’ TV Channels. However, the policy does not have any specific provision pertaining to broadcasting of content through digital media. In the background of free mushrooming of news/ other content over the internet and possibly over the mobile, it is important that this gap in the FDI policy is addressed and the provisions governing foreign investment in the activity are clearly spelt out. Accordingly, 26% FDI under government route has been permitted for uploading/ streaming of News & Current Affairs through Digital Media.

13-Mar-2020: Foreign Investments and 'Make in India' Programme

Since the launch of Make in India programme, FDI inflow during the period April 2014 to December 2019 has been USD 335.33 billion which is nearly 51% of cumulative FDI in India since April 2000.  In 2018-19, FDI inflow stood at a record of USD 62 billion, highest ever recorded for a fiscal year ever. The financial year wise FDI Inflow and FDI Equity inflow is placed at Annexure I. The state-wise details of FDI Equity inflow are maintained w.e.f. October, 2019 and placed at Annexure II.

Make in India’ is not a scheme rather an initiative which was launched on September, 2014 with the objective of facilitating investment, fostering innovation, building best class manufacturing infrastructure, making it easy to do business and enhancing skill development. The initiative is further aimed at creating a conducive environment for investment, modern and efficient infrastructure, opening up new sectors for foreign investment and forging a partnership between government and industry through positive mindset.

Make in India initiative has made significant achievements and presently focuses on 27 sectors under Make in India 2.0. The Department for Promotion of Industry and Internal Trade is coordinating action plans for 15 manufacturing sectors, while Department of Commerce is coordinating action plans for 12 service sectors.

At the same time, investment promotion and facilitation activities under the Make in India initiative are being undertaken by several Central Government Ministries/ Departments and various State Governments from time to time. The data about total number of manufacturing units set up is therefore not maintained centrally. Further, Ministries formulate action plans, programmes, schemes and policies for the sectors being dealt by them. This Department does not maintain information on such formulations by the line ministries.

                                                           ANNEXURE I

11-Mar-2020: Status of ‘Make in India’ Initiative

The Capital Procurement of defence equipment is undertaken based on threat perception, operational challenges and technological changes and to keep the Armed Forces in a state of readiness to meet the entire spectrum of security challenges. While doing so, attempt is made at achieving substantive self-reliance in the design, development and production of equipment, weapon systems, platforms required for defence in as early a time frame as possible and creating conditions conducive for private industry to play an active role in this endeavour and enhancing the potential of SMEs in indigenisation and broadening the defence R&D base in the country. A number of measures have been taken to promote ‘Make in India’ in defence manufacturing by harnessing the capabilities of the public and private sectors such as introduction of new category of procurement ‘Buy {Indian-IDDM (Indigenously, Designed, Developed and Manufactured} and ‘Strategic Partnership Model’ in Defence Procurement Procedure (DPP); according preference to ‘Buy (Indian-IDDM)’, ‘Buy (Indian)’, ‘Buy & Make (Indian)’ & ‘Make’ categories of capital acquisition over ‘Buy (Global)’ & ‘Buy & Make (Global)’ categories, simplification of Make-II procedure, etc. As a result of the aforesaid initiatives, the Government in the last three years i.e. from 2016-17 to 2018-19 and till December, 2019, has accorded Acceptance of Necessity (AoN) to 138 proposals worth Rs. 2,69,465.26 crore approximately, under these categories of Capital Procurement which promote domestic manufacturing as per DPP-2016.

The ‘Make’ procedure seeks to address the multiple objectives of self-reliance, wider participation of Indian Industry, impetus for MSME sector, sound implementation, transparent execution and timely induction of equipment into Indian Armed Forces. The ‘Make’ category, is further sub divided into the following:-

1. ‘Make-I’ (Government Funded) - Projects under Make-I sub category have been simplified with provisions for funding of 90% of development cost by the Government to Indian Industry and reserving Government funded Make-I projects not exceeding development cost of Rs. 10 crore and procurement cost of Rs. 50 crore per year for MSMEs.
2. ‘Make-II’ (Industry Funded) - A new separate ‘Make-II (Industry Funded)’ procedure was notified by the Government in February, 2018, to primarily focus upon development of equipment/ system/ platform or their upgrades or their subsystems/ sub-assembly/ assemblies/ components and import substitution. Under this procedure, no Government funding is envisaged for prototype development purposes but there is an assurance of orders on successful prototype development. This procedure has number of industry friendly provisions such as relaxation of eligibility criterion, minimal documentation, reduced timelines, provision for consideration of Suo-moto proposals by industry/individuals, etc. Out of 44 projects which have been accorded AIP, 13 projects have been accorded “Acceptance of Necessity (AoN)” and “Project Sanction Order (PSO)” has been issued for 09 Projects.

The Defence Procurement Procedure stipulates a time schedule for completion of the development & procurement cycle of Make Procedure. However, the time taken to undertake capital procurement of defence equipment depends on the nature and complexity of the equipment being developed involving rigorous trials, after which detailed bid evaluations and comprehensive commercial negotiations have to be undertaken. Nonetheless, under the Defence Procurement Procedure (DPP)-2016, Government has laid down further provisions for ensuring swift decision making and simplification of the processes.

Due to strategic consideration, specific details of individual projects is not being disclosed.

24-May-2017: Cabinet approves policy for providing preference to 'Make in India' in Government procurements

The Union Cabinet has approved a policy for providing preference to 'Make in India' in government procurements. The new policy will give a substantial boost to domestic manufacturing and service provision, thereby creating employment. It will also stimulate the flow of capital and technology into domestic manufacturing and services. It will also provide a further thrust towards manufacture of parts, components, sub-components etc. of these items, in line with the vision of 'Make in India'.

The new policy is the reflection of the Government of India to encourage ‘Make in India’ and promote manufacturing and production of goods and services in India with a view to enhancing income and employment. Procurement by the Government is substantial in amount and can contribute towards this policy objective. Local content can be increased through partnerships, cooperation with local companies, establishing production units in India or Joint Ventures (JV) with Indian suppliers, increasing the participation of local employees in services and by training them.

The policy will be implemented through an Order pursuant to Rule 153(iii) of the General Financial Rules, 2017 to provide purchase preference (linked with local content) in Government procurements. Under the policy, preference in Government procurement will be given to local suppliers. Local suppliers are those whose goods or services meet prescribed minimum thresholds (ordinarily 50%) for local content. Local content is essentially domestic value addition.

In procurement of goods for Rs. 50 lakhs and less, and where the Nodal Ministry determines that there is sufficient local capacity and local competition, only local suppliers will be eligible.

For procurements valued at more than Rs. 50 lakhs (or where there is insufficient local capacity/ competition) if the lowest bid is not from a non-local supplier, the lowest-cost local supplier who is within a margin of 20% of the lowest bid, will be given the opportunity to match the lowest bid. If the procurement is of a type that the order can be divided and given to more than one supplier, the non-local supplier who is the lowest bidder will get half of the order and the local supplier will get the other half if it agrees to match the price of the lowest bid. If the procurement cannot be divided, then the lowest cost local supplier will be given the order if it agrees to match the lowest bid.

Small purchases of less than Rs.5 lakhs are exempted. The order also covers autonomous bodies, government companies/ entities under the government’s control.

The policy also requires that specifications in tenders must not be restrictive e.g. should not require proof of supply in other countries or proof of exports in respect of previous experience. They must not result in unreasonable exclusion of local suppliers who would otherwise be eligible, beyond what is essential for ensuring quality or creditworthiness of the supplier.

The policy lays down a procedure for verification of local content relying primarily on self-certification. There will be penal consequences for false declarations. In some cases, verification by statutory / cost auditors etc. will be required.

A Standing Committee in Department of Industrial Policy and Promotion will oversee the implementation of this order and issues arising therefrom, and make recommendations to Nodal Ministries and procuring entities.

The policy has been developed keeping in view the core principles of procurement including competitiveness and adhering to sound procurement practices and execution of orders. The policy would continue to maintain the balance between promoting 'Make in India' and ensuring timely, value-for-money products for the procuring entities.