At a time when the government is preparing to introduce a revised framework for Bilateral Investment Treaties (BITs) to boost foreign direct investment (FDI), the Department for Promotion of Industry and Internal Trade (DPIIT) is strengthening its investor facilitation mechanism in Europe, addressing investment-related issues raised by companies from Germany, France, the UK, Poland, the Netherlands, Belgium and Italy, sources said.
With the India-EFTA Trade and Economic Partnership Agreement (TEPA) in force since last year, the government has also set up an EFTA desk to engage with investors from the region and facilitate investment opportunities through sustained dialogue.
“We are also working on attracting investments from EFTA. We have set up an EFTA desk in western India and are maintaining an ongoing dialogue with investors to understand the kind of opportunities they are looking for. The desk then helps facilitate their investments,” an official said.
The government is also set to introduce an updated framework for BITs, with the revised model treaty awaiting Cabinet approval. The move comes as India seeks to increase FDI inflows. Gross FDI inflows fell to less than 1% of GDP in 2025, compared with a peak of 3.6% in 2008. The ratio stood at 2.42% in 2020.
With the India-UK trade agreement and the EFTA pact now in force, the government is looking to deepen investment flows from these regions and expects investments to increase further once the proposed India-EU trade agreement is implemented.
To facilitate higher inflows, DPIIT is also coordinating with various ministries, industries and state governments to resolve investment-related issues, the source said.
“Since we deal with investment promotion and facilitation, we have a fast-track mechanism for resolving pending issues of foreign investors. We currently have this mechanism covering around nine or 10 countries, including major investors such as the US, Japan and South Korea, as well as European countries such as Germany, France, the UK, Poland, the Netherlands, Belgium and Italy. We take up the issues faced by investors from these countries and work towards resolving them,” the official said.
According to the latest DPIIT data, FDI equity inflows from all countries stood at $19.8 billion in the first quarter of the current financial year.
While the UK and Germany feature among the top 10 sources of FDI equity inflows into India, their combined contribution remains modest. FDI equity inflows from the UK stood at $229 million in the first quarter, while Germany accounted for $237 million.