Indian Government Eases FDI Reforms Across 15 Major Sectors

The government is likely to announce major reforms across 15 sectors, including construction, defence, retail and plantation with an aim to ease foreign direct investment in the country.

The move comes at a time when Prime Minister Narendra Modi is scheduled to visit the UK and Turkey, where he is slated to attend meeting of G-20 leaders. Reforms push is also seen as an indication by the government that NDA's loss in Bihar Assembly election will not hamper its plans to take the country forward.

Allaying fears that Bihar results would slow down its economic agenda, the government is keen to push through the FDI reforms as it wants to give the Opposition a clear message that the government is committed on its development agenda. PM Modi had come under heavy criticism from the Opposition which claimed that he deviated from NDA's promised agenda of development and reforms during Bihar election campaigning.

Meanwhile, in another major development, the inter-ministerial body FIPB approved eight foreign investment proposals, including those of India Advantage Fund and L&T Finance Holdings, totaling Rs 5,200 crore.

The Foreign Investment Proposal Board (FIPB), headed by Economic Affairs Secretary Shaktikanta Das, also rejected five proposals and deferred decision on four.
      
Proposal of India Advantage Fund, an AIF managed by ICICI Venture Fund, entails an investment worth Rs 2,950 crore, said Finance Ministry sources. Proposal of LnT Finance Holdings involves FDI inflow of Rs 700 crore.

In defence, the government has allowed foreign investment up to 49 per cent under the automatic route, earlier under the government approval route. Investments over 49 per cent will now be cleared by the FIPB instead of the Cabinet Committee on Security. Portfolio investors and foreign venture capital firms can also invest up to 49 per cent as against 24 per cent earlier. 

Courtesy: Agencies