The government is moving ahead with further opening of print media, construction and retail sectors to foreign investments, and detailed deliberations in this regard were held in the finance ministry Wednesday. The commerce and industry ministry may soon approach the Union Cabinet to get the final approval on the proposals, sources said.
According to them, the government is considering to relax foreign direct investment (FDI) norms in certain areas of print media. Currently, foreign investment is allowed in areas such as printing of newspapers and publishing of scientific magazines with certain conditions and FDI caps.
The government may also permit overseas retailers to open wholly-owned stores for selling ‘Made in India’ products only. Besides, it is considering to allow retail stores, which would attract FDI, to sell domestically manufactured personal and home care products up to 25 per cent of their total turnover, a demand which has been strongly pitched by Union Food Processing Minister Harsimrat Kaur Badal. Badal has time and again asked to permit FDI in non-food items, along with food products, under the multi-brand retail policy.
There is also a proposal to ease the policy in construction and development sector, under which an Indian company could be allowed to bring FDI even for undeveloped plots in any project. Currently, 100 per cent FDI is allowed in the construction sector subject to various conditions. One of the norms is that the Indian investee company is permitted to sell only developed plots, which means plots where trunk infrastructure – roads, water supply, street lighting, drainage, and sewerage, have been made available. Sources said the government may put certain restrictions while making changes in this condition.
The whole exercise is aimed at providing investor friendly climate to foreign players and in turn attract more FDI to boost economic growth and create jobs. The government is also mulling easing policy in single brand retail trading, under which 100 per cent FDI would be allowed through automatic route with certain conditions.
Currently, FDI up to 49 per cent is permitted under the automatic route but beyond that limit, government’s nod is required. The easing of the policy will be on the lines of the announcements made by Finance Minister Arun Jaitley in the Budget for 2017-18.
The government last year relaxed FDI norms in over a dozen sectors, including defence, civil aviation, construction and development, private security agencies, real estate and news broadcasting. Foreign investments are considered crucial for India, which needs around USD 1 trillion for overhauling its infrastructure sector such as ports, airports, and highways to boost growth. Foreign investments will help improve the country’s balance of payments situation and strengthen the rupee value against other global currencies, especially the US dollar.