Page 21 - Policy Economic Report - December 2024

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

• Improved Business Environment: India made remarkable progress in improving its business
environment, climbing from 142nd in 2014 to 63rd in the World Bank’s Doing Business Report
(DBR) 2020, published in October 2019 before its discontinuation. This 79-rank jump over five
years reflects the government’s sustained efforts to simplify regulations, reduce bureaucratic
hurdles, and create a more business-friendly environment, significantly boosting investor
confidence.

• Policy Reforms: To promote FDI, the government has put in place an investor friendly policy,
wherein most sectors, except certain strategically important sectors, are open for 100% FDI under
the automatic route. Further, to simplify tax compliance for startups and foreign investors, the
Income Tax Act, 1961 has been amended in 2024 to abolish angel tax and to reduce income tax
rate chargeable on income of a foreign company.

Thus, India’s remarkable progress in attracting foreign direct investment is evident from the $42.1 billion
inflows during the first half of the current fiscal year and the cumulative $1 trillion since April 2000. Factors
like improved global competitiveness, a dynamic innovation ecosystem, and a business-friendly
environment have been key drivers. Initiatives such as "Make in India," liberalization of sectoral policies,
and recent policy changes, including greater FDI in the space sector, reflect the country’s proactive
approach

7. India, ADB sign $500 mn loan to support green infrastructure projects

India and the Asian Development Bank (ADB) signed a $500 million loan to support green and sustainable
infrastructure projects aligned with the country's climate commitments.

The agreement was inked on December 20, 2024 and the ADB loan, with a sovereign guarantee, will be
extended to the India Infrastructure Finance Company Limited (IIFCL)

To meet its net-zero commitments, the country needs immense private capital investment that will
require innovative financing platforms and risk-mitigation instruments to address inherent sector risks
and market asymmetries.

This policy-based loan aims to expand India's manufacturing sector and improve the resilience of its supply
chains. The signatories to the loan agreement were Department of Economic Affairs (DEA), Ministry of
Finance; Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and
Industry; and the ADB.

The Support for Marginalized Individuals for Livelihood and Enterprise (SMILE) program is a programmatic
policy-based loan (PBL) to support the government in undertaking wide-ranging reforms in the logistics
sector in India. The programmatic approach comprises two subprograms, which aim to expand India's
manufacturing sector and improve the resilience of its supply chains.

The program establishes and operationalizes a comprehensive policy framework to enhance logistics
efficiency through strengthening the institutional bases for multimodal logistics infrastructure
development at the national, state, and city levels.

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