(a) the details of Foreign Direct Investment (FDI) brought into MSME sector in the country during the last two years and the current year;
(b) whether the government has taken measures to attract FDI into MSMEs sector; and
(c) if so, the details thereof and if not, the reasons therefor ?
MINISTER OF STATE FOR MICRO, SMALL AND MEDIUM ENETRPRISES
(SHRI BHANU PRATAP SINGH VERMA)
(a) to (c): Specific data for Foreign Direct Investment (FDI), brought into MSME sector is not maintained. However, sector-wise details of FDI Equity inflow reported in all sectors during last two financial years i.e. 2020-21, 2021-22 and current financial year i.e. 2022-23 (up to May, 2022) is Annexed herewith.
Further, Government has put in place a liberal and transparent policy for attracting FDI wherein most sectors, except certain strategically important sectors, are open for 100% FDI under the automatic route.
As per extant FDI Policy, 100% FDI is permitted in manufacturing sector is under automatic route. Manufacturing activities may be either self-manufacturing by the investee entity or contract manufacturing in India through a legally tenable contract, whether on Principal to Principal or Principal to Agent basis. Further, a manufacturer is permitted to sell its products manufactured in India through wholesale and/or retail, including through e-commerce, without Government approval. Further, notwithstanding the FDI policy provisions on trading sector, 100% FDI under Government approval route is allowed for retail trading, including through e-commerce, in respect of food products manufactured and/or produced in India.
Further, Para 5.2.15.3 of the FDI Policy provides provisions for FDI in Single Brand Retail Trading which inter-alia stipulate that in respect of proposals involving foreign investment beyond 51%, sourcing of 30% of the value of goods purchased, will be done from India, preferably from MSMEs, village and cottage industries, artisans and craftsmen, in all sectors. Similarly Para 5.2.15.4 of the FDI Policy provides provisions for FDI in Multi Brand Retail Trading which inter-alia stipulate that at least 30% of the value of procurement of manufactured/processed products purchased shall be sourced from Indian micro, small and medium industries, which have a total investment in plant & machinery not exceeding US $ 2.00 million.