The government is working to simplify India's foreign investment regime. The Foreign Exchange Management Act (FEMA) and related rules are being recast to make the framework more principle‑based. The goal is to create a clearer and easier process for investors.
Joint Secretary Alok Tiwari spoke at the FICCI Capital Markets Conference in Mumbai. He said India wants to become a major financial centre and mobilise resources for the Viksit Bharat goal. He added that attracting foreign capital is essential for this ambition.
Tiwari said there is broad agreement among the government, regulators and market participants to encourage foreign investment. He described the reforms as a work in progress that all parties are working on. He emphasised that the changes will be more principle‑based, easier to follow and navigate.
The revised FEMA rules are currently open for public consultation by the Reserve Bank of India (RBI). Investors and stakeholders can submit their views and suggestions. The RBI will review the feedback before finalising the rules.
The government noted that foreign capital had not been very forthcoming recently. However, the investment cycle appeared to have turned in July. Some challenges remain, but the outlook is improving.
Deepening capital markets and expanding financing sources are key priorities for the Department of Economic Affairs. The department aims to attract more foreign capital to support economic growth and the Viksit Bharat vision.
Tiwari also highlighted the need to strengthen India's corporate bond market. Secondary‑market liquidity and participation are below desired levels. A committee has been set up to develop a framework for market‑making in corporate bonds, and suggestions from market participants are invited.
The reforms are expected to make it simpler for foreign investors to enter India. They also aim to improve transparency and reduce bureaucratic hurdles. The government remains committed to creating a friendly investment environment.