Foreign Direct Investment (FDI) Foreign investment is one area which economies around the world look at with at most precision. Which sectors to open up to foreign funds, how much control to cede to foreign investors and what all clearances to mandate are some questions that pose challenges to most Governments. In India the policy on foreign investment is framed by the Central Government.
On an annual basis, it issues a consolidated circular detailing the policy stance. The sectoral limits, approval routes and investment linked conditionalities are laid down in the policy stance. It also issues Press Notes as and when changes in the policy are proposed. Regulations are issued under the Foreign Exchange Management Act, 1999 (FEMA) to give a legal backing to these policies.