Foreign direct investments (FDI) in India’s renewable sector stood at $1.27 billion (~₹96.96 billion) for the first nine months of the financial year (FY) 2019-20. The sector received $1.45 billion (~₹110.53 billion) in the entire FY 2018-19.
The renewable sector has been witnessing a steady increase in the inflow of FDI in the past few years, which increased from $783.57 million (~₹59.89 billion) ) in 2016-17 to $1.2 billion (~₹92.06 billion) in 2017-18 and then to $1.44 billion (~₹110.53 billion) in 2018-19.
Answering a question raised in the Lok Sabha, Union Commerce Minister, Piyush Goyal said that the FDI in the renewable sector starting from the FY 2010-11 up to the nine months of the financial year, 2019-20, stood at $8.28 billion (~₹633.04 billion) while the total FDI in the power sector during this period was $10.28 billion (~₹785.6 billion).
FDI up to 100% is permitted in the renewable energy sector under the automatic route, and no prior government approval is required in India.
Recently, Mercom Capital released its Q1 2020 Solar Funding and M&A Report which revealed that the total corporate funding in the solar sector, which includes venture capital funding, public market, and debt financing has plummeted by 31% at $1.9 billion (~₹143.4 billion) in Q1 2020 as compared $2.8 billion (~₹211.35 billion) raised in Q1 of 2019.
Recently, the Ministry of Commerce and Industry revised its FDI policy intending to curb takeovers or acquisitions of Indian companies during the ongoing coronavirus pandemic. According to the FDI policy, a non-resident entity can invest in India, subject to the FDI policy except in those sectors or activities which are prohibited like defense, space, atomic energy. The revised policy now says that any investment by an entity of a country that shares a land border with India or where the beneficial owner of investment is a citizen of any of those countries will need government approval. Earlier, only Bangladesh and Pakistan were under this category, which has now been expanded to all neighboring countries sharing the border with India.
Rakesh is a staff reporter at Mercom India. Prior to joining Mercom, he worked in many roles as a business correspondent, assistant editor, senior content writer, and sub-editor with bcfocus.com, CIOReview/Silicon India, Verbinden Communication, and Bangalore Bias. Rakesh holds a Bachelor’s degree in English from Indira Gandhi National Open University (IGNOU). More articles from Rakesh Ranjan.