Govt unveils major changes in FDI policy to boost jobs
In a major liberalisation drive today, the Union Government has radically opened up the FDI regime to provide a huge impetus to employment and job creation in the country. The decision was taken at a high-level meeting chaired by Prime Minister Narendra Modi, according to an official statement from the PMO.
This is the second major reform after the last radical changes announced in November 2015. “Now most of the sectors would be under automatic approval route, except a small negative list. With these changes, India is now the most open economy in the world for FDI,” the statement said.
It also tweaked rules to allow companies such as Apple to open their own stores in the country by exempting them from local sourcing requirements for three years under the single brand retail segment for entities with cutting edge technology.
“It has now been decided to relax local sourcing norms up to three years and a relaxed sourcing regime for another five years for entities undertaking Single Brand Retail Trading of products having 'state-of-art' and 'cutting edge' technology.
“Amendments to the FDI Policy are meant to liberalise and simplify the FDI policy so as to provide ease of doing business in the country leading to larger FDI inflows contributing to growth of investment, incomes and employment,” the statement said.
The fresh liberalisation of FDI rules opens food retail, airlines and private security firms to higher overseas investment.
Other sectors in which FDI norms have been relaxed include e-commerce in food products, broadcasting carriage services, private security agencies and animal husbandry.
This is the second major reform in the FDI space. The Centre in last November had significantly relaxed the foreign investment regime.
Foreign investment is considered crucial for India, which needs around $1 trillion for overhauling its infrastructure sector such as ports, airports and highways to boost growth. A strong inflow of foreign investments will help improve the country's balance of payments situation and strengthen the rupee value against other global currencies, especially the US dollar. (SH)
Fibre2Fashion News Desk – India