Modi govt's Diwali dhamaka: Nod to FDI reforms in 15 sectors including aviation, defence

In a clear message that the government is firmly committed to its reforms agenda despite political setbacks in Bihar, the Centre today announced key FDI related reforms and liberalisation in 15 major sectors of the economy.

From today’s FDI push, the sectors that would benefit are: agriculture and animal husbandry, plantation, mining and mineral separation of titanium bearing minerals and ores, its value addition and integrated activities. The other sectors likely to see more foreign investments are defence, broadcasting sector, civil civiation, construction development sector, Cash and Carry Wholesale trading/Wholesale Trading (including sourcing from MSEs), single brand retail trading and duty free shops, private sector banking and manufacturing sector. There is also increase of sectoral cap.

Norms have now been changed to allow limited liability partnerships, downstream investment and approval conditions while allowing investment by companies owned and controlled by Non-Resident Indians (NRIs). Rules of establishment and transfer of ownership and control of Indian companies have also been relaxed.

“The crux of these reforms is to further ease, rationalise and simplify the process of foreign investments in the country and to put more and more FDI proposals on automatic route instead of government route where time and energy of the investors is wasted,” a commerce ministry release said.

With 50 million houses for poor to be built, the FDI in the construction sector can be a major boost.

“Opening up the manufacturing sector for wholesale, retail and e-commerce so that the industries are motivated to Make In India and sell it to the customers here instead of importing from other countries,” the release said.

Expanding its financial ambit, the government also allowed Foreign Investment Promotion Board (FIPB) to deal with proposals upto Rs 5,000 crore from the current Rs 3,000 crore.

“Few other proposals seek to enhance the sectoral caps so that foreign investors don’t have to face fragmented ownership issues and get motivated to deploy their resources and technology with full force,” the release said.

Commenting on the FDI announcements, economic affairs secretary Shaktikanta Das said, “The government’s decision on liberalising FDI policy is a welcome step and is part of improving ease of doing business. These decisions come into force with immediate effect.” DIPP secretary Amitabh Kant said: “This is Diwali gift for investors. This is the biggest bang reform of the government.”

With PTI input