FDI reforms a ‘Panic reaction’ post Raghuram Rajan’s call on second term: Congress

Former defence minister AK Antony said that the changes in FDI norms in the defence sector “poses a big threat to national security and India’s independent foreign policy”.

By: Express News Service | New Delhi | Updated: June 22, 2016 11:14:16 am
Jairam Ramesh, congress, FDI reforms, Raghuram Rajan, Congress, raghuram rajan exit, FDI, 100% fdi, fdi civil aviation, fdi defence, defence 100% fdi, aviation 100% fdi, fdi policy, narendra modi, modi fdi, modi news, india news Jairam Ramesh called it a “panic reaction” to show the world that it is business as usual even as Rajan has announced his exit.

The Congress on Monday said that the government has succumbed to the American pharmaceutical lobby and called the foreign direct investment (FDI) overhaul a “panic reaction” to show the world that it is business as usual even as Raghuram Rajan has announced his exit as reserve Bank Governor.

Former defence minister AK Antony said that the changes in FDI norms in the defence sector “poses a big threat to national security and India’s independent foreign policy”. He said it is to be noted that the sweeping changes were announced immediately after Prime Minister Narendra Modi’s US visit.

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“Allowing 100 per cent FDI in defence sector means that the sector is thrown mostly into the hands of Nato-American manufacturers,” he said demanding a rollback. While Jairam Ramesh called it a “panic reaction” to show the world that it is business as usual even as Rajan has announced his exit, former commerce minister Anand Sharma said that most of the sectors were open in any case and he failed to understand why the government is trying to give an impression that these are big-ticket reforms.

Sharma said the government has done away with the need for prior government approval for up to 74 per cent FDI brownfield investment in pharmaceuticals.

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“There was a reason why this condition was kept so that the critical oncology injectables which were being taken over were protected. And there was another pre-condition put in … there shall not be a non-compete clause … so that the Indian entity can then continue to establish and produce the same vaccines, medicine and injectables …This government has surrendered (that),” he said.

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Sharma slammed the decision to do away with the condition of access to ‘state-of-the-art technology’ in defence. “… tomorrow your investors may come in with obsolete technology and start manufacturing in this country. What was in the long-term interest of India was to have capability, to make high end defence platforms with the assimilation of the best of technologies,” he said. He also said the decision to do away with the 30 per cent local sourcing clause in single brand retail sector that was to encourage small and medium enterprises and boosted job creation.

CPM General Secretary Sitaram Yechury said that the easing of norms was the direct by product of Indo-US joint statement.

“The across-the-board concession for FDI, we think is the direct by product of the latest Indo-US joint statement. India is providing our resources in terms of cheap labour and cheap physical resources for the maximisation of profit by foreign companies. And that will be at the expense of our economy and our domestic industry. Already the outflow from India is larger than the inflow of FDI … You are now opening up to foreign capital to have greater access in India … That means the problem is elsewhere,” he said.

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