NEW DELHI: Giving the much needed reforms impetus to the economy, Prime Minister Narendra Modi-led NDA government has announced Foreign Direct Investment (FDI) reforms in as many as 15 sectors.
According to a government's press release, "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."
These FDI reforms are set to benefit sectors such as agriculture and animal husbandry, plantation, defence, Single Brand Retail Trading and Duty free shops, private sector banking, broadcasting, civil aviation and manufacturing.However, the release did not mention about the percentage cap for FDI in all these sectors.
"Further refining of foreign investments in key sectors like construction where 50 million houses for poor are to be built. 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 added.
The proposed reforms also enhance the limit of Foreign Investment Promotion Board (FIPB) from current Rs 3,000 crore to Rs 5,000 crore. The proposal also contains many other long pending corrections including those being felt by the limited liability partnerships as well as NRI owned companies who seem motivated to invest in India. 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.
India got FDI of $19.39 billion in the April-June period, according to government data, up 29.5% over the year earlier. The government has been pushing hard to drum up overseas investment, easing FDI regulations in various sectors including the railways, medical devices, insurance, pension, construction and defence.
A simpler foreign direct investment (FDI) policy, further easing of the external commercial borrowing (ECB) regime and changes in the public-private partnership (PPP) framework to attract more private investment could also be announced.