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There will be some clarifications on the foreign direct investment (FDI) policy. And whatever clarifications will be issued will be prospective, Commerce and Industry Minister Anand Sharma said after meeting Finance Minister P. Chidambaram, on Thursday.
The clarifications are likely to be mostly related to investment in multi-brand retail, as prospective investors like Walmart, Carrefour and Tesco have been seeking clarity on a number of issues, including mandatory sourcing of inputs.
On the issue of the Finance Ministry’s proposal to re-define the word “control’’ in the FDI policy to align it with the definition suggested in the Companies Bill, the Minister said there were no differences between the two Ministries on the issue.
“There is a complete agreement and understanding between the Ministries,” Sharma said. The Securities and Exchange Board of India’s takeover code and the proposed Companies Bill define control as the right to appoint majority of directors as well as to control management and policy decisions including via shareholder agreements. The FDI policy defines control only as the right to appoint majority of directors.
The Department of Industrial Policy and Promotion has been opposing a change in the definition of “control” in the FDI policy.
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