Reforms in FDI: Govt.

To further boost the investment environment and to bring in foreign investments in the country, the Government of India has brought in FDI related Reforms and liberalisation touching upon 15 major Sectors of the Economy.  The salient measures are:

  1. Limited Liability Partnerships, downstream investment and approval conditions.
  2. Investment by companies owned and controlled by Non-Resident Indians (NRIs)
  3. Establishment and transfer of ownership and control of Indian companies
  4. Agriculture and Animal Husbandry
  5. Plantation
  6. Mining and mineral separation of titanium bearing minerals and ores, its value addition and integrated activities
  7. Defence
  8. Broadcasting Sector
  9. Civil Aviation
  10. Increase of sectoral cap
  11. Construction development sector
  12. Cash and Carry Wholesale Trading / Wholesale Trading (including sourcing from MSEs)
  13. Single Brand Retail Trading and Duty free shops
  14. Banking-Private Sector; and
  15. Manufacturing Sector

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.  The proposed reforms also enhance the limit of Foreign Investment Promotion Board (FIPB) from current Rupees Three thousand crores to Five thousand crores.  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.

Along with these sectoral reforms, DIPP has also been advised to consolidate all FDI related instructions contained in various notifications & press notes and prepare a booklet so that the investors don’t have to refer to several documents of different timeframes.

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