The Hindu Business Line : Law soon to regulate FDI flows in sensitive areas: Kamal Nath

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Law soon to regulate FDI flows in sensitive areas: Kamal Nath

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`There is no need to act in haste on colas issue'

The Union Minister for Commerce and Industry, Mr Kamal Nath, flanked by Mr R. Seshasayee, President, CII (right); Mr Douglas Baillie, CEO, HLL (left); and Mr Suhel Seth, Chairman, The Marketing Summit 2006 & Managing Partner, Counselage (extreme left); at the summit in the Capital on Thursday. — Kamal Narang

New Delhi , Aug. 17

A comprehensive legislation to streamline the process of assessing security threats arising from business transactions and also to enable government agencies to decide on the cases of foreign direct investment (FDI) in sensitive areas is on the anvil, according to the Union Commerce and Industry Minister, Mr Kamal Nath.

"The Bill (for the National Security Exception Act) is in the formative stage. There are some concerns on FDI (in some sectors and from some sensitive countries). In cases like these, the Government steps in," Mr Kamal Nath, said after inaugurating a Marketing Summit organised by the Confederation of Indian Industry (CII).

The first draft of the Bill has been finalised by the National Security Council Secretariat.

No wrong signals

Mr Kamal Nath highlighted that other countries too have such arrangements to check FDI from certain countries and in sensitive sectors. He said that the proposed law would have no impact on FDI flows and would not send any wrong signals.

Apart from FDI, the Bill is also expected to deal with the issue of participation of foreign firms in global tenders floated by public sector companies and Government departments.

Meanwhile, Mr Kamal Nath said that the ongoing row over high level of pesticide in soft drinks was unlikely to impact FDI inflows into the country. "Whenever anything of this sort happens, it makes people think twice. In this case this (impact on FDI inflows) will not happen but we must be very careful about it," the Minister told reporters on the sidelines of the summit.

Asked if the bans imposed by certain States were justified, Mr Kamal Nath said that the Government would have to see that the findings are accurate and factually correct and the due process of law should take course and there is no need to act in haste.

He, however, declined to comment on the ban of production and sale of colas imposed by the Left-ruled Kerala. "West Bengal, which is also ruled by Left, has taken a diametrically opposite stand to the issue. India is not the only country where Pepsi and Coke do business," Mr Kamal Nath said.

At the same time, the Minister also said that public health was very important and that the Government was looking into the matter.