The Narendra Modi-led government expects its reforms to increase FDI inflows by 40-45% next year.
The foreign direct investment (FDI) was up 18% to $26.51 billion during January-September period in 2015. The country had witnessed FDI inflows to $28.78 billion in 2014 against $22 billion in 2013.
"FDI will grow by 40-45% in 2016 despite the global slowdown. The government has taken vast number of policy measures this year," Secretary in the Department of Industrial Policy and Promotion (DIPP) Amitabh Kant told PTI.
Services, computer hardware and software, telecom, automobile and trading are the sectors that have seen heavy FDI inflows this year.
India saw highest FDI inflows from Singapore, followed by Mauritius, the UK, Japan, the Netherlands and the US.
India was also the top global destination for FDI in the first half of the calendar year 2015, surpassing China and the US.
After coming to power in May last year, the National Democratic Alliance (NDA) government has taken various measures to bring in more foreign investment and boost its manufacturing activity through its 'Make in India' initiative. The government has also eased e-commerce norms for overseas companies with manufacturing operations in India.
Kant said the government was looking to bring 98% of sectors eligible for FDI under the "automatic route" so that businesses are not required to approach the Finance Ministry or 'Udyog Bhavan' for any approvals.
He added the measures taken by the government to improve ease of doing business would help in attracting more foreign capital.
India's rank in the "Doing Business Report", released by the World Bank in October, moved up to the 130th position this year from last year's 142nd (out of 189 countries), giving a boost to Prime Minister Narendra Modi's push to making the country appear in the top 50 list in three years.
The improvement in India's rank was due to reforms initiated by the Modi government in the past one year, the World Bank had said.
Meanwhile, the experts say that expectations over a significant increase in FDI inflows in 2016 are growing and inflow situation will depend on the 'Make in India' programme to a great extent.
"FDI should improve next year but much will depend on the performance of 'Make in India' programme in terms of more reform measures and steps to further improve ease of doing business in the country," said Krishan Malhotra of corporate law firm Shardul Amarchand and Mangaldas.
