The government should announce confidence building reforms (CBRs) such as allowing FDI in multi-brand retail to address concerns expressed by US President Barack Obama on India’s investment climate,industry body CII said today.
“It is time to announce a few confidence building reform measures such as increasing FDI (foreign direct investment) in defence production… opening of FDI for multi-brand retail,” CII President Adi Godrej said in a statement.
These steps would go a long way in improving perception about India globally,he said.
There has been a demand to raise FDI cap from 26 per cent to 49 per cent in the defence production.
Obama,in an interview,had noted that it is still too hard to invest in India. “In too many sectors,such as retail,India limits or prohibits the foreign investment… which is necessary for India to continue to grow,” he stated.
Planning Commission Deputy Chairman Montek Singh Ahluwalia had also said yesterday that India needs to improve investment climate. “I think many countries have been expressing concerns on investment climate…we need to strengthen it”.
CII said the global investors’ perception on India has been affected due to the recent developments like tax avoidance rules,which have since been put on hold.
“With the introduction of General Anti-Avoidance Rules (GAAR) which were intended to plug taxation loopholes and the announcement on retrospective amendments to income tax law have affected business sentiments and investors’ confidence globally,” it said.