Relaxation in FDI Norms: Big Bang for Reforms Expected Soon

By Faiz Askari

NEW DELHI: In a major announcement the government is expected to soon bring relaxations in the foreign direct investment (FDI) policy in certain sectors. There are sectors such as defence, civil aviation, real estate and infrastructure, private security agencies and news broadcasting which are getting considered for this policy makeover.

According to  Vivek Gupta, Partner, BMR Advisors, “Relaxation of norms for FDI is something that needs to be pursued by the Indian government with commitment, particularly when globally, many countries at an individual level are trying to de-globalise and emphasize domestic rather than international investment. It is important however that any such liberalization of norms results in a final ground level reality, that allows businesses to see feasibility over a reasonable time frame. Too many conditionalities and constraints only defer the break even for such ventures and makes investment decisions that much harder economically.  One hopes therefore that the norms will balance societal requirements and yet, offer an economically viable proposition.”

The betterment of the FDI policy is exclusively and primarily aimed at creating a positive business environment by removing common obstacles in doing business.

The easing of the policy will be on the lines of the announcements made by Finance Minister Arun Jaitley in the Budget for 2017-18. The government last year relaxed FDI norms in over a dozen sectors in addition to those which are quoted above.

This move is expected to boost the sentiments and moral of the investors and can realistically bring an empowering environment towards bringing more foreign investments in the country. This move also can be considered as a ‘Big Bang’ for Narendra Modi leadership.