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Prime Minister Narendra Modi will hold a review meeting of the country's foreign direct investment (FDI) policy on Friday to explore further opening up of sectors such as print, retail and construction.
Finance Minister Arun Jaitley and Commerce & Industry Minister Nirmala Sitharaman will attend the meeting, a government official told BusinessLine.
“The government has been working on further liberalisation of the FDI policy for sometime and the Finance Minister had also announced it in the Union Budget. The Prime Minister wants an account of where things stand,” a government official said.
Jaitley had announced dismantling of the Foreign Investment Promotion Board (FIPB) and easing of FDI rules in more sectors during his Budget presentation in February. While the notification abolishing FIPB was issued late last month, the govt is yet to move on FDI rules.
“The FDI policy has been liberalised considerably over the last two years, but there are sectors like construction, print, retail, telecom and defence where investors are looking for further easing, of rules,” the official said.
The Department of Industrial Policy & Promotion will give a presentation on the FDI policy focussing on individual sectors.
The government recently allowed 100 per cent FDI in food retail, but the stiff condition of sourcing all items locally has made investors unhappy.
The Centre's refusal to entertain FDI proposals in the multi-brand retail segment has also not gone down well with trade partners such as the US and EU.
In the defence sector, too, not much FDI has come in despite 100 per cent foreign investment being allowed as the condition of technology transfer has not gone down well with foreign defence manufacturing companies.
“Some decisions like relaxation of conditions and allowing FDI in multi-brand retail are tough and can only be taken at the highest level,” the official said.
While the government now allows FDI in most sectors through the automatic route, there are some such as broadcast content, print media, multi brand retail and banking where foreign investment is restricted (in most cases less than 50 per cent) and allowed only through the government approval route.
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