India most open economy for FDI: Modi

“The move would provide a major impetus to job creation and infrastructure”, the newspaper quoted Prime Minister Narendra Modi as saying in a statement.

USA technology giant Apple Inc will have to re-submit its application for opening single brand retail trade stores in India and issues concerning “cutting edge” technology will be settled by the concerned administrative ministry, an official said.

Prime Minister Narendra Modi hailed the changes to the foreign direct investment rules, stressing his government’s reform credentials. This has been changed to automatic route if FDI is up to 74%, beyond that, getting a nod from the government will continue to be necessary.

The government’s statement hailed the changes as making India now the most open economy in the world for foreign direct investment.

Rajan’s decision, whose reforms have been credited for much of the economy’s success in recent years, came as a jolt to the country’s financial markets.

Singh felt that “there is no doubt that India today is the most preferred investment destination in the world”.

In an unusually strong reaction former union defence minister A K Antony charged that the changes in the FDI policy pose a big threat to national security and the country’s independent foreign policy.

“The government plans to go for a massive improvement in India’s global and domestic connectivity, affordability and ease of doing business”, said Dubey.

“We welcome the move by the government of India to permit 100 per cent FDI in trading, including e-commerce, of food products manufactured or produced in India”. But while looking at the proposals that call for investment beyond 49 per cent, a condition that they will bring with them access to “state-of-the-art” technology has been done away with. Presently, 100 per cent FDI is allowed through the automatic route in greenfield airport projects, while it is 74 per cent in brownfield ones.

The limit of FDI in Indian carriers has been raised to 100% from the previous 49%, however the cap on investment by overseas airlines remains at 49%. The most important announcement made on Monday relates to civil aviation in which 100 per cent FDI has now been allowed in airlines, except by foreign carriers. His government has touted a 29 percent rise in FDI to $40 billion in the fiscal year to March as proof the policies are gaining traction.

Monday’s reforms, however, do not require parliamentary approval.

Singapore Airlines CEO Goh Choon Peng told local media recently, “We have seen things liberalized … but from our perspective more can be done in terms of removing restraints”. It has been chose to do away with this requirement of controlled conditions for FDI in these activities.