FDI inflow increased by 11% from USD 42.06 billion to US$ 46.82 billion

The major highlights of the Department for Promotion of Industry & Internal Trade during the year 2020 are as follows:

EASE OF DOING BUSINESS

Doing Business Report,2020: To improve Ease of Doing Business in the country, the emphasis has been on simplification and rationalization of the existing rules and introduction of information technology to make governance more efficient and effective. As per the Doing Business Report (DBR) ,2020 of the  World Bank’s released  on 24^th October, 2019, India’s rank has moved upwards at  63^rd position amongst 190 countries from its rank at  77nd  position  in  2019. India has improved its rank in 7 out of 10 indicators and has moved closer to international best practices. The DBR, 2020 acknowledges India as one of the top 10 improvers, third time in a row, with an improvement of 67 ranks in three years. It is also the highest jump by any large country since 2011. India’s progress in EoDB rankings since 2009 and the comparative position on the 10 indicators in DBR 2019 and 2020 are shown in the graphs below:

India’s ranking in World Bank Doing Business Reports

India’s progress in Ease of Doing Business

State Reform Action Plan

Since 2014 to track the implementation of business reforms at the State level, DPIIT in partnership with the World Bank, has been annually ranking all States and UTs based on the assessments of reforms in the specified areas of ease of doing business. A 301-point State Reforms Action Plan, 2020 was shared with States/UTs on 25th August, 2020 for its implementation by 31^st December, 2020. The Action Plan is spread across 24 reform areas and seeks to promote sector-specific approach so as to create an enabling business environment across various sectors in the country. The various sectors include Trade License, Healthcare, Legal Metrology, Fire License/NOC, Cinema Halls, Hospitality, Telecom, Movie Shooting and Tourism.

District Reform Action Plan

District level functionaries are key touch points for an entrepreneur and hence a district level reform exercise is the next logical step in the reform agenda. DPIIT has prepared and shared a 213-point District Reform Action Plan, 2020 with States/UTs on 25.08.2020. The Action Plan covers 8 reform areas with States & UTs. The District Plan covers 43 NOCs/Permissions/ Registrations/ Certificates which will ease regulations for sectors like retail, education, health, food and beverages, real estate, gems and jewellery mining and entertainment.

1. INVESTMENT PROMOTION

Production-Linked Incentive Scheme

To provide a major boost to manufacturing, the government has launched Production-Linked Incentive (PLI) Scheme for 13 sectors, 3 sectors in March 2020    and 10 sectors in November 2020with an outlay of Rs 1.97 lakh crore over the next five years. The sectors are (i) Automobiles and Auto Components, (ii) Pharmaceuticals Drugs, (iii) Specialty Steel, (iv) Telecom & Networking Products, (v) Electronic/Technology Products, (vi) White Goods (ACs and LEDs), (vii) Food Products, (viii) Textile Products: MMF segment and technical textiles, (ix) High efficiency solar PV modules, and (x) Advanced Chemistry Cell (ACC) Battery (xi) Medical devices (xii) Large scale electronics manufacturing  including mobile phones (xiii)  Critical Key Starting materials /Drug intermediaries and APIs. The PLI schemes will be implemented by the concerned ministries/departments and will be within the overall financial limits prescribed. The largest financial outlay has been given to the PLIs on Automobile and Auto Components and on Advanced Chemistry Cells (ACC).

Empowered Group of Secretaries and Project Development Cells

In the midst of COVID-19 pandemic, with a view to support, facilitate and provide investor friendly ecosystem to investors investing in India, an Empowered Group of Secretaries (EGoS), and Project Development Cells (PDCs) in Ministries/Departments have been set up. These institutions are meant to fast-track investments in coordination between the Central Government and State Governments and thereby grow the pipeline of investible projects in India to increase domestic investments and FDI inflow.

PDCs have now been established in 29 Ministries/Departments of the Government of India, headed by respective Joint Secretary-level nodal officers. All PDCs have assumed a smooth functioning, executing clearly defined investor engagement strategies, which includes identification of prospective investors; multi-level engagements with investors that have shown interest; active engagement with a wide range of stakeholders to resolve existing investors’ issues, to develop new projects/proposals and to promote existing investment opportunities.

Investment Clearance Cell

Following the Hon’ble FM’s budget announcement, an Investment Clearance Cell (ICC) to provide facilitation and support to businesses through a one-stop digital platform – the central Single Window System (SWS) is being set up and the platform is planned for launch with select states by 15 April, 2021. This national portal will integrate the existing clearance systems of the various Ministries/Departments of Govt. of India and State Governments without disruption to the existing IT portals of Ministries.

Industrial Information System

DPIIT has developed an Industrial Information System (IIS) which provides a GIS-enabled database of industrial areas including clusters, parks, nodes, zones, etc. across the country to help investors identify their preferred location for investment. 3390 industrial parks/estates/SEZs in 4.76 lakh hectares have been mapped on Industrial Information System (IIS) along with net land area availability. A national level land bank is being developed by integrating IIS with State industrial GIS systems. A GIS Land Bank was launched by Hon’ble Minister of Commerce & Industry on 27 August 2020 for 6 states [Gujarat, UP, Odisha, Telangana, Goa, Haryana]; and now 7 more states [Maharashtra, Karnataka, Punjab, Himachal Pradesh, Uttarakhand, Andhra Pradesh and Jharkhand] have been on-boarded, which brings total number of states on-boarded to 13. This will enable the investors to see plot level data and availability of updated land related information in real time. A mobile app is also available for easy viewing by users.

Industrial Park Rating System

Industrial Park Rating System (IPRS) is an exercise which recognizes best performing parks, identifying interventions and serving as a decision support system for investors and policy makers in being undertaken by DPIIT, under the technical guidance of ADB. DPIIT now aims to develop the first annual ‘Industrial Park Rating System 2.0’ that shall widen its coverage and aim to bring in qualitative assessment further to the pilot phase. Under IPRS 2.0, the assessment of Industrial Parks including private industrial parkswith introduction of qualitative indicators for assessing these parks will be undertaken this year. IPRS 2.0 will include the introduction of tenant feedback mechanism which will help in assessment of the developer’s responses and also engage directly with the ultimate beneficiaries of this exercise. The exercise of assessment of the Industrial Park will conclude with releasing of report on Industrial Park Rating System 2.0 by March-2021.

Focus Sub-Sectors

DPIIT is working closely with 24 sub-sectors which have been chosen keeping in mind the Indian industries strengths and competitive edge, need for import substitution, potential for export and increased employability. These 24 subsectors are – furniture, air-conditioners, leather and footwear, ready to eat, fisheries, agri-produce, auto components, aluminium, electronics, agrochemicals, steel, textiles, EV components and integrated circuits, ethanol, ceramics, set top boxes, robotics, televisions, close circuit cameras, toys, drones, medical devices, sporting goods, gym equipment. Efforts are on to boost the growth of the sub-sectors in a holistic and coordinated manner

One District One Product (ODOP)

The Hon’ble PM’s clarion call of ‘Atmanirbhar’ to the nation in his address on the 74^th Independence Day – August 15, 2020 explicitly emphasized that we as a nation must move on the path of value addition to our natural as well as human resources. DPIIT is working on the initiative of One District One Product to take this vision forward. OODP has been envisaged to be a transformational step forward realizing the true potential of a district, fuel economic growth and generate employment and rural entrepreneurship. ODOP has already been implemented in some of the States (for example, UP). By scaling it up as a national movement, we can look at creating a pool of 739 products from 739 districts in India that can be regulated.

To begin with, 103 districts have been identified with specific products having manufacturing / export potential. 68 products out of the 106 products are available on big ecommerce platforms. With a view to promote manufacturing and exports, an analysis of specific interventions such as marketing, technology, design, etc. is underway along with identification of the agency responsible for the same. Merger of the two initiatives “ODOP” and “District as Export Hub” as a common initiative to be led by Department of Commerce and supported by DPIIT.

2. INTELLECTUAL PROPERTY RIGHTS

The IPR regime in India has transformed in the past two decades. The changes have been effected in infrastructure upgradation, manpower augmentation, regulatory reforms and IT enablement resulting in speedy disposal of IP applications. Electronic filing systems are in place for filing of applications for Patents, Trademarks, Designs and Geographical Indications. The Copyright Office, also has advanced facilities for online filing for registration of copyrights. Real time dissemination of information, in respect of IP applications, positions India’s IP Offices at par with its peers globally.

The major achievements in 2020 are explained below.

a) In order to simplify the process and reduce compliance burden, amendments have been made through Patent Amendment Rules 2020, related to the working of Patented Invention in India as required under section 8 in Form 27. Additionally, filing of a statement on the commercial working of a patent within 6 months instead of 3 months as prescribed earlier and only one form may be filled in respect of multiple related patents assigned to common patentee.

b) To give a boost to the registration of Authorised users of a Geographical Indications product, Geographical Indications of Goods (Registration and Protection) (Amendment) Rules, 2020 were notified in the Gazette on August 26, 2020. The amendment has reduced the fees to be paid for the GI registration process and eased the procedure for registration of an authorized user of a registered GI.

c) Scheme for facilitating Startups Intellectual Property Protection (SIPP) launched for encouraging innovation and creativity of startups has now been extended up to 31^stMarch, 2023.

 No. of Patent and Trademark applications filed by Startups under Startups Intellectual Property Protection

d) To encourage Small and Medium Enterprises (SMEs) to seek protection for their innovations processing fees for patent applications by small entities has been further reduced by 80% (from the existing 50% provided in May 16, 2016) as compared to large entities. As a result, the patent filing and processing fees for small entities is now at par with the fees for individual applicants and start-ups.

e) Last year, India and Japan had signed a bilateral “Patent Prosecution Highway”. The first year of a three year’s Pilot PPH Program with Japan was a successful drive whereby 100 patent applications were received, which allowed 100 applications from Japan in a year.

f) International Collaborations – India has signed MoUs with various countries so as to lay the foundation for a technical cooperation between the two countries with the aim of strengthening the protection of intellectual property rights for the benefit of innovation and sustainable economic growth. Building on this foundation, India this year signed MoUs with the United States of America, Denmark and Portugal. Subsequently, various IPR awareness drives were carried out in collaboration with Denmark.

g)  Adapting to the COVID-19 pandemic, a shift to the digital space for carrying forward the objective of creating IPR awareness was observed and organised 224 webinars for different stakeholders such as FICCI/CII/INTA/Atal Tinkering Labs. Additionally, a specific initiative related to sensitization of IPR enforcement agencies was also carried out in collaboration with State Judicial Academies.

h) Keeping with the trend, several social media campaigns related to IPR awareness were executed, such as “Quiz Time with CIPAM”, and “Defeat Counterfeit”. Further, a campaign “Gift a GI” for promotion and marketing of GI products was also launched, especially during festive seasons. In the spirit of ‘vocal for local’ theme, another campaign talking about success stories of indigenous technologies and startupshas been recently launched in collaboration with AGNII.

Figures of IPR filings and registered in 2020-21

3. STARTUP INDIA

With over 40,000 recognized startups, India has transformed into the third largest startup ecosystem supplementing employability as well as enhancing our self-reliance. Startup India’s role has been vital in nurturing entrepreneurship beyond Tier 1 cities. The regional growth through the efforts of States and Union Territories (UTs) has created a national ecosystem to thrust our economic goals

With the launch of the Startup India campaign, recognized startups have now spread across 586 districts with a total of 29 States and UTs with Startup Policies in place, creating more than 4.2 lakh jobs. Entrepreneurs now have options to avail benefits across a range of laws, regulations, fiscal and infrastructural support. Startup India has also played a pivotal role in strengthening the key pillars identified for our startup economy.

Salient features of the schemes provided by Startup India are:

• An INR 10294.27 crore Startup Fund of Funds has been launched by the Ministry of Commerce and Industry to promote availability of risk capital in the Indian economy. As of 13^th November 2020, the Fund of Funds has committed INR 4326.95 crore to 60 private venture funds.
• Startup India has facilitated procurement from startups on the Government E-Marketplace (GeM) portal. Presently, 7438 startups have serviced orders worth over INR 1800 crores on GeM portal.
• A number of ‘Startup Grand Challenges’ with Government bodies and corporates have been organized to channelize them to work with startups and incorporate the spirit of innovation and entrepreneurship.
• To further bridge the Indian Startup ecosystem with the Global ecosystem, engagement models with 11 countries including Korea, UK, Netherlands, Sweden, Portugal, etc. have been built.
• Startup India launched the StartupYatra in 2017 which took the momentum to rural and non-metro regions, reaching the grass root level of the states.
• DPIIT launched the first edition of States’ Startup Ranking Framework 2018 in February 2018 and second edition in May 2019. State Startup Ranking is an effort to identify key actions undertaken by various States to help and scale up Startups. It is also an opportunity to recognize and acknowledge relevant departments of the States and UTs that have worked consistently in this mission to make India a thriving Startup nation. The results for SRF 2.0 were declared in September 2020. To facilitate continuity in the exercise that has led to immense growth of startup ecosystem on in the states, the State Ranking Framework 2020 is being planned and will be undertaken in the coming months. To further this endeavour, the next framework delves deeper into policies and incentives to make India one of the best startup nations in the world.
• Actions taken by the Startup India initiative have resulted in a culture of innovation and entrepreneurship in the country. The results are visible across all fields of human endeavour and all sectors of the economy. The ‘National Startup Awards’ have been conceptualized to further strengthen the Indian startup ecosystem. These awards seek to recognize and reward outstanding Startups and ecosystem enablers (incubators and accelerators) that are building innovative products or solutions and scalable enterprises, with high potential of employment generation or wealth creation, demonstrating measurable social impact. The first edition of the awards was launched in November 2019 across 12 Sectors and 3 Special Categories, successfully receiving 1,682 applications. The Winners were announced on the 6th of October 2020 for the first edition. The 2nd National Startup Awards are in the planning stage and will be open for applications in the coming months.
• The Atal Innovation Mission (AIM) under the Atal Incubation Centres (AICs) scheme has selected 102 incubators across the country to provide financial support, with grants worth INR 201.1 crores being disbursed to 68 incubators. This fund has supported incubation of more than 1,250 startups, created over 13,800 jobs and has led to over 2,000 events and 700 trainings being conducted.
• Atal Tinkering Labs (ATL)by the Atal Innovation Mission (AIM) aims to inculcate entrepreneurial skills in school students. Over 14,000 schools have been selected to set up Atal Tinkering Labs (ATL) with 5068 ATLs having received INR 12 lakhs grants each and are operational.

4. FOREIGN DIRECT INVESTMENT

Foreign Direct Investment has played an important role in this process of Globalization and is a major driver of economic growth and a source of non-debt finance for the economic development of India. It has been the endeavour of the Government to put in place an enabling and investor friendly FDI policy. Government on its part has undertaken a number of reforms in different areas of economy. In the last one years, to liberalise and simplify FDI policy for providing Ease of doing business and attract investments, following reforms have been undertaken by the Government across sectors:

Insurance Intermediaries

Vide Press Note 1(2020) 100% FDI has been permitted in Intermediaries or Insurance Intermediaries including insurance brokers, re-insurance brokers, insurance consultants, corporate agents, third party administrator, Surveyors and Loss Assessors and such other entities, as may be notified by the Insurance Regulatory and Development Authority from time to time.

Civil Aviation

In order to permit Foreign Investment up to 100% by those NRIs, who are Indian Nationals, in case of M/s Air India Ltd., vide Press Note 2(2020); Government amended the extant FDI Policy to permit Foreign Investment(s) in M/s Air India Ltd. by NRIs, who are Indian Nationals, up to 100% under automatic route.

Curbing opportunistic takeovers/acquisitions of Indian companies due to the COVID-19 pandemic

In order to curbing opportunistic takeovers/acquisitions of Indian companies due to the COVID-19 pandemic, vide Press Note 3(2020) dt. 17.04.2020, Government amended the FDI policy according to which an entity of a country, which shares land border with India or where the beneficial owner of an investment into India is situated in or is a citizen of any such country, can invest only under the Government route. Further, in the event of the transfer of ownership of any existing or future FDI in an entity in India, directly or indirectly, resulting in the beneficial ownership falling within the restriction/purview of the said policy amendment, such subsequent change in beneficial ownership will also require Government approval.

Defence Sector

Now, FDI in the defence sector is allowed up to 74% through automatic route (from earlier 49%) for companies seeking new industrial licenses. FDI beyond 74% and up to 100% will be permitted under Government route. For existing FDI approved holders/defence licensees, infusion of fresh foreign investment up to 49% resulting in change in equity/ shareholding pattern can be done by making declaration within 30 days (earlier Government approval was required). Now, foreign investments in the defence sector shall be subject to scrutiny on grounds of National Security.

Consolidated FDI Policy Circular 2020

This Department has released ‘Consolidated FDI Policy Circular 2020’ and the same is uploaded on this Department’s website for reference of various stakeholders including Ministries/Departments and prospective investors.

Standard Operating Procedure (SOP)

SOP has been amended for ease of processing FDI proposals and is uploaded on
Foreign Investment Facilitation Portal for reference of various stakeholders including Ministries/Departments and prospective investors.

FDI applications disposed of in 2020

26 FDI applications marked to DPIIT have been disposed of in 2020.

FDI Statistics

During the first seven months of F.Y. 2020-21, total FDI inflow increased by 11% from USD 42.06 billion (April, 2019 to October, 2019) to US$ 46.82 billion (April, 2020 to October, 2020). FDI equity inflow increased by 21% to US$ 35.33 billion (April, 2020 to October, 2020) from US$ 29.31 billion reported in the same period of previous financial year.

5. PUBLIC PROCUREMENT

To promote “Manufacturing Investment” in India, usage of made in India products is being encouraged in government procurement. Keeping above perspective, DPIIT has revised its Public Procurement (Preference to Make in India) Order on 16.09.2020 with the following important changes:

a) For purchases with estimated value less than Rs. 200 crore, Global tender enquiry shall not be issued.

b) Suppliers offering items with minimum 50% domestic value addition will get purchase preference over other suppliers in government procurement.

c) Suppliers offering items with less than 20% domestic value addition can’t participate in domestic/national bidding process.

d) Nodal Ministries/ Departments have been authorized to notify higher minimum local content requirement for Class-I/ Class-II local suppliers i.e. higher than 50/20%.

Amendment has been done in GFR/PPP-MII to keep check on entities operating from countries sharing land border with India from participating in Government procurement/tenders –Applications received are being forwarded to MHA & MEA for security and political clearance. It is expected that usage of made in India products will promote local manufacturing thereby enhancing income and job opportunities for local people.

6. TECHNICAL REGULATIONS/QUALITY CONTROL ORDERS

One of the instruments for attracting investment in post COVID economy is adoption of Technical Regulations- a WTO compliant instrument. Technical regulations/Quality Control Orders (QCOs) are issued by DPIIT for industries falling under its domain to provide safe reliable quality goods; minimizing health hazards to consumers; promoting exports, promoting import substitutes and restricting imports of sub-standard products. DPIIT as per its mandate has been issuing QCOs since 1987. QCOs for 100 products (e.g. Air conditioner, Toys, Footwears, Pressure cooker, Microwave oven etc.) under BIS Act, 1986/2016 as well as 15 products under Indian Explosives Act, 1884 (Gas Cylinders, Valves and Regulators) have been issued. 71 HSN Codes as identified by Department of Commerce (DoC) based on import surge have been examined by DPIIT. Out of which QCOs notified for 22; additional 13 are under consideration; on the rest 36 HS lines QCO not feasible. DPIIT is continuously engaged with BIS and relevant stakeholders for notification of QCOs.

7. INDUSTRIAL CORRIDORS

National Industrial Corridor Development Programme is India’s most ambitious infrastructure programme aiming to develop new industrial cities as “Smart Cities” and converging next generation technologies across infrastructure sectors. The National Industrial Corridor Programme includes the following Industrial Corridors:

• Delhi Mumbai Industrial Corridor (DMIC)
• Amritsar Kolkata Industrial Corridor (AKIC)
• Chennai Bengaluru Industrial Corridor (CBIC) with extension to Kochi via Coimbatore
• East Coast Economic Corridor (ECEC) with Vizag Chennai Industrial Corridor (VCIC) as Phase 1
• Bengaluru Mumbai Industrial Corridor (BMIC)

The objective is to expand India’s Manufacturing & Services base and develop National Industrial Corridors as a “Global Manufacturing and Trading Hub”. The programme will provide a major impetus to planned urbanization in India with manufacturing as the key driver. In addition to new Industrial Cities, the programme envisages development of infrastructure linkages like power plants, assured water supply, high capacity transportation and logistics facilities as well as softer interventions like skill development programme for employment of the local populace.

A National Master Plan for providing multimodal connectivity infrastructure depicting the economic zones as fulcrums of economic development interconnected with a network of multimodal connectivity infrastructure for seamless movement of people, goods & services has been prepared and is under consideration for approval of CCEA. As part of the National Master Plan, 11 (Eleven) Industrial Corridors have been identified with 32 nodes/projects proposed to be developed in 04 phases until 2024-25”.

Major achievements in 2020 are given below.

Completion of Trunk Infrastructure Components

• Trunk infrastructure activities completed at Integrated Industrial Township (IITGN) at Greater Noida (747 acres), Uttar Pradesh and Integrated Industrial Township (IITVUL) at VikramUdyogpuri (1100 acres), Ujjain in Madhya Pradesh.
• Trunk infrastructure activities nearing completion at Dholera Special Investment Region (DSIR) (22.5 sq. kms), Gujarat and ShendraBidkin Industrial Area (AURIC) (19 sq. kms), Aurangabad, Maharashtra.

Land allotted and investment secured

• A total of 84 plots admeasuring nearly 554.73 acres have been allotted to companies with investment to the tune of more than Rs. 16,100 crore including investors like HYOSUNG (South Korea), NLMK (Russia), HAIER (China), TATA Chemicals & AMUL so far. Further, 09 companies have also started their commercial production.
• During the year, 09 plots (industrial and residential) admeasuring 53 acres allotted in Shendra Industrial City and 02 plots admeasuring 10 acres awarded in Integrated Township at VikramUdyogpuri.
• Apart from the above allotted plots, developed land parcels are available for immediate allotment as per details below:

Logistics Data Bank (LDB) project is currently operational across 28 ports in India covering approximately 150+ Container Freight Stations/Inland Container Depots and 60+ Toll plazas. More than 30 million EXIM containers have been tracked till date. During the year, the services have been expanded till Nepal and Bangladesh.

8. DEVELOPMENT OF BACKWARD REGIONS

One of the principal objectives of the Government of India’s industrial strategy is to promote balanced industrial development throughout the country. For stimulating industrial development of hilly States, the Union Government has been supplementing the efforts of State Governments through various policies / schemes / packages of incentives. Region specific incentives schemes for the States of J&K, Uttarakhand, Himachal Pradesh and Northern-Eastern Regions are being implemented by DPIIT.

9. PETROLEUM AND EXPLOSIVES SAFETY ORGANIZATION (PESO)

           Petroleum and Explosives Safety Organization (PESO) functioning as a subordinate organization under Department for Promotion of Industry & Internal Trade (DPIIT), Ministry of Commerce and Industry has undertaken various initiatives for ease of doing business and assisting the stake holders. Some important initiatives undertaken are as follows:

Launch of paperless licensing system: With an aim of eliminating human interface, to revamp the functioning of PESO and to enhance efficiency and transparency, paperless application and approval / grant / renewal of licenses have been launched by PESO with effect from 16/01/2020. The paperless application for grant / renewal of licenses will save precious time, stationery/postage and physical storage space. Forgery & misuse of licenses will be completely eradicated as the licenses will be issued through a secure system.

The authenticity of the license can be verified through PESO’s website (https://online.peso.gov.in/PublicDomain/). As a step ahead and to promote the digital payment initiative of the Government of India, PESO has introduced online fee payments in the application module. Fees can be submitted through credit card, debit card and net banking. With effect from 20/11/2019, receipt of fees through demand drafts has been completely stopped and fees is being received through Non Tax Receipt Portal (Bharat Kosh).