Which of the following ministry administers the Foreign Direct Investment in India through the government route?

The correct answer is Ministry of Commerce and Industry.

Key Points

• The Ministry of Commerce and Industry administers Foreign Direct Investment (FDI) in India through the government route.
• The Department for Promotion of Industry and Internal Trade (DPIIT), under this Ministry, is responsible for formulating and monitoring the FDI policy.
• FDI proposals requiring government approval are considered by the Foreign Investment Facilitation Portal (FIFP), managed by DPIIT.
• The Ministry ensures that FDI aligns with India’s economic goals, such as job creation, technological advancement, and infrastructure development.
• FDI policies are periodically reviewed to attract investments across various sectors while safeguarding national interests.

Additional Information

• Foreign Direct Investment (FDI):
  • FDI refers to investments made by a foreign entity in the business interests of another country.
  • FDI can be made through two routes in India: Automatic Route (no government approval required) and Government Route (approval required).
  • The Government Route is applicable for sectors where national security, cultural sensitivity, or critical resources are involved.
• Foreign Investment Facilitation Portal (FIFP):
  • FIFP is an online platform for processing FDI applications requiring government approval.
  • It ensures transparency, speed, and ease of doing business for foreign investors.
  • Launched in 2017, the portal replaced the earlier Foreign Investment Promotion Board (FIPB).
• DPIIT:
  • The Department for Promotion of Industry and Internal Trade (DPIIT) is a key department under the Ministry of Commerce and Industry.
  • DPIIT is tasked with policy formulation on FDI, intellectual property rights (IPR), and promoting industrial growth in India.
  • It plays a significant role in initiatives like Make in India and Startup India.
• FDI Trends in India:
  • India has emerged as a top destination for FDI due to its large consumer base, skilled workforce, and robust economic growth.
  • Sectors attracting the highest FDI include services, computer software and hardware, telecommunications, trading, and construction development.
  • FDI inflows promote economic development, technology transfer, and global market integration.