The Modi Government is agile and alert towards the interest of industry, this was the core message of Mrs Nirmala Sitharaman, Minister of State, Commerce & Industries Ministry at the Parliament session. She emphasized by saying, “Significant changes have been made in the FDI policy regime from time to time, to ensure that India remains increasingly attractive and Investor-friendly.”
India has one of the most liberalized FDI policy regimes in the world. Government has put in place an investor-friendly policy on FDI, under which FDI, up to 100 per cent, is permitted, under the automatic route, in most sectors/activities, Mrs Sitharaman said in a written reply in Rajya Sabha.
In the light of the importance of foreign direct investments for economic growth and development, the government announced key FDI reforms in the defence and railways sectors.
The entire range of rail infrastructure was opened to 100 per cent FDI under the automatic route, and in defence, sectoral cap was raised to 49 per cent. To boost infrastructure creation and to bring pragmatism in the policy, the Government reviewed the FDI policy in the construction development sector also by creating easy exit norms, rationalizing area restrictions and providing due emphasis to affordable housing.
To give impetus to the medical devices sector, a carve out was created in FDI policy on the pharmaceutical sector and now 100 per cent FDI under automatic route is permitted. The Government, in order to expand insurance cover to its large population and to provide required capital to insurance companies, raised the FDI limit in the sector to 49 per cent. Pension sector has also been opened to foreign direct investment up to the same limit.
The FDI policy provisions pertaining to NRI investment have also been clarified by providing that for the purposes of FDI policy, investment by NRIs on non-repatriation basis under Schedule 4 of FEMA (Transfer or Issue of Security by Persons Resident Outside India) Regulations will be deemed to be domestic investment at par with the investment made by residents.
Government has undertaken a number of steps to improve Ease of Doing Business in India. Amongst the other important steps, Ministries and State Governments have been advised to simplify and rationalize the regulatory environment through business process reengineering and use of information technology, she said.