Easing of FDI norms to send positive signal to investors, says Corporate India

New Delhi: Government’s move to relax foreign investment rules in 15 sectors and ease the process for FDI approval proves the reforms agenda is on track and will send a positive signal to global investors, India Inc said today. “This is again an affirmation of the government’s commitment to strengthen the economy and generate more and more jobs for the youth of the country.[caption id=“attachment_2414244” align=“alignleft” width=“380”]  Cheering for FDI. Reuters[/caption] “Simplification of procedures for foreign investments, putting more sectors on the automatic route, introducing fungibility between FDI and FII and having a single reference document for all FDI related guidelines are steps that would boost investor confidence,” Ficci president Jyotsna Suri said. Pushing ahead with major reforms, the government today relaxed foreign investment rules in 15 sectors such as civil aviation, banking, defence, retail and news broadcasting and eased the process for approval of FDI. “The government’s comprehensive announcement today on easing FDI norms in 15 major sectors of the economy is one of the boldest reform moves yet. “This is a clear and strong message that reforms are not only on track but are going to be aggressive. For the markets and for industry, these could not have come at a better time,” CII director general Chandrajit Banerjee said. While 100 percent foreign direct investment (FDI) has been allowed in DTH, cable network and plantation crop, overseas investment limit in uplinking of news and current affairs TV channels has been raised to 49 percent from 26 percent. “Liberalisation of FDI in a host of key sectors like defence, civil aviation, retail, banking and e-commerce couple of days before Prime Minister Narendra Modi’s visit to UK will send a huge positive signal to global investors about the focus returning to the economic agenda after Bihar elections,” Assocham secretary general DS Rawat said. He said a stable form of foreign inflows by way of FDI is also imperative for India in the wake of continuing uncertainty over the direction of US interest rates. The government relaxed conditions for FDI in single-brand retail and allowed 100 percent FDI under automatic route in duty-free shops and Limited Liability Partnerships (LLP) and eased foreign investment norms in the defence sector. It has also raised the FIPB’s monetary limit to Rs 5,000 crore from Rs 3,000 crore for approving FDI proposals. “Liberalisation of FDI in important sectors like defence, manufacturing among others will bring in much – needed technology into the country which can then be leveraged to make India an exporting nation in the high-tech engineering industries,” EEPC India chairman TS Bhasin said. “The Indian engineering industry needs induction of foreign technology which can come in only when the FDI regime is liberalised and caps are dismantled or enhanced. This is a step in the right direction which will help the Indian manufacturing,” he said. PTI