Early this year, the central government approved significant changes in the foreign direct investment (FDI) regime in India. For instance, it allowed 100 per cent investment in civil aviation and food processing sectors, 100 per cent investment under the automatic route in broadcasting carriage services and eased norms in the pharmaceutical and defence sectors.
These radical changes were introduced to make the country’s business climate more friendly and, more importantly, to improve job creation and infrastructure.
But it seems that despite the liberalisation of FDI norms, some niggles remain.
An official of the government recently said it will be looking into FDI norms on account of some “very specific policy issues in various sectors”, as reported in Business Standard.
Ramesh Abhishek, who is Secretary of the Department of Industrial Policy and Promotion, said while addressing India-Japan Business Cooperation Committee:
We are also trying to address very specific policy issues in various sectors. We have identified a number of them that remain despite liberalisation in FDI (policy). There could be issues in various sectors.
Abhishek exclusively mentioned the areas of infrastructure and taxation, where he claimed that policy issues were currently being worked on.
There are so many other issues on infrastructure, taxation... We are taking up all this. Some of them are being resolved.
The current National Democratic Alliance government has been working towards making India a more business-friendly country, as that is critical to the flagship Make in India programme. It has also been working on reforming the taxation system. With the roll-out of the Goods and Services Tax next year, the government would have taken another significant stop towards promoting investment in and across the country.
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