Foreign Investment Framework

A major highlight of India’s economic reforms since 1991 has been a calibrated but progressively liberal foreign investment policy. Over the two decades since the first round of reforms, India has emerged a significantly open investment destination, with foreign ownership allowed for all but a few sensitive areas of the economy. The foreign investment policy has been updated periodically, besides the numerous notifications (Press Notes) that serve as continuous improvements or refinements in the policy itself, based on practical considerations or issues represented by the investor community.

Foreign investment can be in the form of a direct investment by an entity (FDI) or can be in the form of an institutional investment (FII), the key distinction being that an institutional entity is merely a financial investor.