Investment Norms

Why it matters

• They balance the need for attracting capital inflow with the requirement to protect sensitive domestic sectors from market volatility.
• These norms serve as a tool for industrial policy by incentivizing investment in priority sectors like infrastructure, technology, and manufacturing.
• Clear and transparent norms reduce regulatory uncertainty, thereby improving the ease of doing business and fostering investor confidence.
• They provide a mechanism for national security oversight by screening investments from entities in jurisdictions that may pose strategic risks.

How it is asked

Focus on the evolution of sectoral caps, the distinction between automatic and government approval routes, and the impact of liberalized norms on the balance of payments and domestic manufacturing competitiveness.