India is a state of static recovery with Covid-19 cases remaining low and other internal as well as external factors impacting major economic rebounds. The war in Ukraine has disrupted supply chain routes and Covid related economic packages are now adding to the inflation increase. This prompted the Reserve Bank of India to take fiscal measures to control it.
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Moody’s – Moody’s Investors Service recently slashed India’s economic growth projection to 8.8 per cent for 2022 from 9.1 per cent earlier, citing high inflation. In its update to Global Macro Outlook 2022-23, Moody’s said high-frequency data suggests that the growth momentum from December quarter 2021 carried through into the first four months this year. However, the rise in crude oil, food and fertilizer prices will weigh on household finances and spending in the months ahead. Rate hike to prevent energy and food inflation from becoming more generalized will slow the demand recovery’s momentum, it said. “We have lowered our calendar-year 2022 growth forecast for India to 8.8 per cent from our March forecast of 9.1 per cent , while maintaining our 2023 growth forecasts at 5.4 per cent,” Moody’s said (the March forecast was covered by Asia Law Portal). Strong credit growth, a large increase in investment intentions announced by the corporate sector, and a high budget allocation to capital spending by the government indicate that the investment cycle is strengthening.
New Cyber Security Reporting Requirements – Further to the cyber security directions issued by the Indian Computer Emergency Response Team (CERT-In) last month (as covered by Asia Law Portal), the Government released a Frequently Asked Questions (FAQs) document which explains the nuances of the directions for enabling better understanding of various stakeholders as well as to promote open, safe & trusted and accountable internet in the country. The FAQs have been prepared in response to general queries received by CERT-In on the directions. These directions in the current form will make it difficult for companies to do business in the country, 11 international bodies having tech giants like Google, Facebook and HP as members said in a joint letter to the government. The international bodies have expressed concerned that the directive, as written, will have a detrimental impact on cyber security for organisations that operate in India, and create a disjointed approach to cyber security across jurisdictions, undermining the security posture of India and its allies in the Quad countries, Europe and beyond. “The onerous nature of the requirements may also make it more difficult for companies to do business in India,” the letter said.
New Portal For Boosting Exports – The Government of India recently launched the Indian Business Portal – An International Trade Hub for Indian Exporters and Foreign Buyers. The Federation of Indian Export Organisations (FIEO) in partnership with GlobalLinker, has designed and developed the “Indian Business Portal”, an International Trade Hub for Indian Exporters and Foreign Buyers. This is a B2B digital marketplace to empower SME exporters, artisans and farmers to identify new markets for their products and grow their sales globally. FIEO represents the Indian entrepreneurs’ spirit of enterprise in the global market and is the apex body of Indian export promotion organizations, which was set up jointly by the Ministry of Commerce, Government of India and private trade and industry in the year 1965 and is a partner of the Government of India in promoting India’s exports. Indian Business Portal is the only such marketplace that is exclusive for exporters registered in India and is custom-built to support exporters with a range of bespoke features and relevant partners integrated to build this ecosystem. A special focus has been dedicated to empowering Indian artisans, farmers, and producers dealing in over 370 Indian Geographical Indication (GI) Categories by helping them digitize their catalogues and showcase their unique offerings globally through Indian Business Portal. A special focus has been dedicated to empowering Indian artisans, farmers, and producers dealing in over 370 Indian Geographical Indication (GI) Categories by helping them digitize their catalogues and showcase their unique offerings globally through Indian Business Portal.
Foreign Investment Facilitation Portal – 853 FDI proposals have been disposed off through the Foreign Investment Facilitation Portal (FIF) since abolishment of Foreign Investment Promotion Board (FIPB). The proposal for abolition of FIPB was approved by the Union Cabinet in its meeting on 24th May, 2017 and was covered by Asia Law Portal. The FDI proposals were, thereafter, required to be filed only on Foreign Investment Facilitation Portal (FIF Portal) at https://fifp.gov.in, (establishment of FIF Portal was covered by Asia Law Portal) which is managed by Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce & Industry. Further, as reported by Asia Law Portal, Standard Operating Procedure (SOP) for processing of FDI proposals, including documents to be filed, through FIF Portal was framed and laid down by DPIIT on 29th June, 2017 with amendment on 09th Jan, 2020.
Since then, not only the FDI has increased so have the number of countries bringing in FDI into India. In FY 2014-15, FDI inflow in India stood at mere USD 45.15 billion, which increased to USD 60.22 billion in 2016-17 and further to the highest ever annual FDI inflow of USD 83.57 billion reported during the FY 2021-22 despite COVID-19 pandemic and recent Russia-Ukraine conflict. During FY 2021-22 FDI has been reported from 101 countries, whereas, it was reported from 97 countries during previous financial year (2020-21).
Regular round table conferences are conducted with investors and law firms alike to keep abreast of the practical issues and problems being faced at the ground level. The FDI proposal form on FIF Portal is regularly reviewed to reduce compliance burden on applicants. FAQs have been updated and placed on DPIIT website and on FIF Portal for ease of access. Hence, continuous effort is made by DPIIT to ensure that India remains an investor friendly destination.