This document defines foreign direct investment (FDI) and discusses India's policies around FDI. It notes that FDI is an important source of economic development in India. The Indian government has implemented favorable FDI policies and relaxed norms across several sectors to increase foreign investment. Major sectors that received FDI inflows between April-September 2016 included services, telecommunications, and trading. Mauritius, Singapore, Japan, and the US were among the largest sources of FDI to India during this period. The document also outlines various tax policies, entry structures, incentives and recent changes to further open sectors to foreign investment.