India cuts red tape to boost foreign investment

The FIPB can recommend foreign investment proposals of up to Rs 3,000 crore to the finance minister for approval and the proposals worth above that are referred to CCEA.

In the defence sector, 49 per cent foreign investment has been allowed under the automatic route, and anything beyond the Foreign Investment Promotion Board (FIPB) nod. It is one more proof of minimum government and maximum governance…

“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 T S Bhasin said.

Eucare Pharmaceuticals had sought approval for foreign investment upto 33 percent by HCP Healthcare Asia Pte.

The biggest beneficiary is likely to be Ikea, which plans to open 25 stores in the country at an investment of Rs.10,500 crore.

The easing of FDI norms also comes at a time when the government has proposed various measures to bolster regional air connectivity in the revised draft civil aviation policy. In construction sector, the government removed two major conditions related to minimum built up area as well as capital requirement. The government has also allowed up to 100 percent FDI in railway projects. The statement said the FDI relaxation in a few of the most critical sectors of the economy augurs well to bring in vibrancy in the sectors in the midst of a depressed global economic sentiment.

It has also clarified that leasing and rental activities will not come under the definition of real estate. “Nobody is going to invest unless they get a profit and right now profitability of Indian plantation industry is very low”, Rajah said. This means that any project regardless of size which is under construction can have access to FDI. The GST is stuck in Parliament, a victim of politics and the Direct Tax Code has been put in the cold storage.

“For the purposes of FDI policy, Indian manufacturer would be the investee company, which is the owner of the Indian brand and which manufactures in India, in terms of value, at least 70% of its products in-house, and sources, at most 30% from Indian manufacturers”, according to the circular.

The government hiked FDI in cable networks, direct to home (DTH), mobile TV, HITS (headend-in-the sky Broadcasting Service) and teleports to 100 per cent from the current 74 per cent. Uplinking and downlinking of general entertainment channels is already at 100% through automatic route.