Question : Relaxation of FDI Norms

(a) whether the Government has recently relaxed the norms for Foreign Direct Investment (FDI) in some key sectors including retail and construction sectors and if so, the details thereof, sector wise;

(b) whether the FDI norms in various sectors would make it a much more attractive destination for overseas investors;

(c) if so, the details thereof and the provisions and guidelines fixed for the foreign investors along with objectives behind the decision and the FDI inflow expected therefrom, sector-wise;

(d) whether the Government has assessed the likely impact on the Indian industries and if so, the details thereof; and

(e) whether various think tanks and Indian industries have opposed this decision and if so, the details thereof along with the preventive steps taken by the Government in this regard?

ANSWER

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THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE & INDUSTRY
(SHRI C.R. CHAUDHARY)

(a): Yes, Madam. The recent amendments to the relevant provisions of the Consolidated FDI Policy Circular of 2017 are detailed in Press Note 1(2018) dated 23.01.2018 (Annexure).

(b) & (c): FDI policy reforms have been carried out so as to provide ease of doing business in the country by simplifying the FDI policy provisions across sectors. The amendments are expected to make India more attractive investment destination and thereby attract larger volume of foreign investment into the country. Nonetheless, FDI inflows in a sector cannot be anticipated as FDI is largely a matter of private business decisions. FDI inflows depend on a host of factors such as availability of natural resource, market size, infrastructure, political and general investment climate as well as macro-economic stability and investment decision of foreign investors.

(d): These measures are expected to increase FDI, which complements and supplements domestic investment. Domestic companies are benefited through FDI, by way of enhanced access to supplementary capital and state-of-art-technologies; exposure to global managerial practices and opportunities of integration into global markets resulting into accelerated domestic growth of the whole country.

(e): No communication opposing this decision has been received by this Department. Moreover, FDI Policy on different sectors are formulated/ reviewed after intensive consultations with stakeholders including Ministries/ Departments concerned, apex industry chambers and other organizations.

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