FDI Share in GDP More Than Halved in Two Decades
Chennai: Foreign investment share in the GDP has more than halved in the past two decades. FDI over GDP averaged 1.6 per cent over the past two decades, compared to nearly 5 per cent for Vietnam, 3.3 per cent for Malaysia, 3.1 per cent for China, and 2.8 per cent for Organization for Economic Cooperation and Development members, finds the World Bank. As per RBI data, India’s net FDI as a share of GDP stood at 3.75 per cent in 2009-10. Although 100 per cent FDI is allowed in tourism under the automatic route, some tourism-related areas are included in restricted lists. India needs to rationalize minimum investment requirements in certain sectors, assist companies to meet the mandatory local sourcing requirements, minimise inconsistencies between national and state-level policies, and strengthen capacity of the states to formulate and implement investment policies, finds the World Bank.
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