Allowing FDI in the courier sector through the automatic route will help speed up investments and remove delays that foreign firms faced earlier while investing in India, say industry watchers.

In the courier or express delivery sector, 100 per cent foreign direct investment levels are already permitted through Foreign Investment Promotion Board (FIPB) route. “Since 100 per cent FDI through the FIPB route is already permitted in the courier sector, the present move would result in speeding up investments,” said Nikhil Shah-Senior Director, Alvarez and Marsal-India, a transaction advisory firm.

Many foreign firms in the express delivery sector such as DHL from Germany, Fedex and UPS from the US, KWE from Japan, GeoPost from France already have a presence in India. Now, it would be interesting to watch out for investments from Chinese firms.

However, even when these firms want to inject more funds into the existing operations, they will be spared from seeking a FIPB approval which could take anything between three-eight months.

“With the investments permitted through the automatic route, the ease of doing first and subsequent round of investments will become easy. Moreover, we could see more investments from the private equity and foreign investment firms,” said Abhishek Chakraborty, Executive Director, DTDC, a firm which recently received FDI from French firm GeoPost.

According to Chitra Shinde, President, Gati-KWE, “There will be better valuations of the existing businesses. This will also be a trigger for consolidations. Investment is required especially to cater to the growing need of business to consumer e-commerce consumption.”

>mamuni.das@thehindu.co.in

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