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Join Date: 05 Mar 2015
Location:  OmanPosts: 24 |
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DIPP seeks cabinet to hike proposal limit to Rs 3,000 crore for four FDI plans |
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DIPP seeks cabinet to hike proposal limit to Rs 3,000 crore for four FDI plans
NEW DELHI:The next round of foreign direct investment reforms is aimed at boosting capital inflows, promoting the 'Make in India' programme and securing infrastructure funding. The Department of Industrial Policy & Promotion, the nodal agency incharge of foreign investment, has sought cabinet approval for four proposals, including treatment of non-repatriable investments by non-resident Indians on a par with domestic funding and hiking the proposal limit requiring cabinet approval to Rs 3,000 crore from Rs 1,200 crore currently. The other proposals relate to allowing foreign-funded companies that make 70% of their products in India to sell online and setting a composite cap for all forms of foreigninvestment."Wehavefinalised and moved four notes to the cabinet that can be seen as the next round of FDI liberalisation in sync with the 'Make in India' objective and making the country an easier place to do business for investors. his will result in large capital inflows in key sectors," a governmentofficial said. In the first 10 months of 2014-15, FDI in India grew 36% to $25.5 billion, according to DIPP data. The proposal on non-repatriable NRI investment will allow Indians living overseas to invest in the country without taking government approval, which is a pre-requisite in many sectors. Non-repatriable investments are those that NRIs cannot take back. "We want NRI money to flow in directly. They have a lot of money and want to invest here.Wewill allowpeople to invest in dollars and let them earn in rupees. We want them to put money in defence, railways, etc.," the official said. The civil aviation sector already allows NRIs to invest up to 100% against an FDI cap of 74% for scheduled air transport services and up to 49% for non-scheduled air carriers. Allowing foreign-funded companies to sell online if they make 70%of their product range domestically will boost domestic brands such as Fab India. The move will benefit and encourage Indian companies to produce locally and also freely access foreign funds for expansion. To simplify the FDI regime, the government proposes to do away with categories and club them all under a composite cap. "The aim is to attract foreign investment by clearing ambiguity in the existing FDI policy related to sectoral caps and conditionality," said the official. The composite cap will include foreign portfolio investment, NRI investment and depository receipts, foreign currency convertible bonds and fully and mandatorily convertible preference shares or debentures. The DIPP proposes to raise the FDI threshold to Rs 3,000 crore for proposals requiring cabinet approval to help attract big-ticket investment in the infrastructure and manufacturing sectors. In the past few months, the government has liberalised the FDI regime in sectors such as medical devices, construction, railways, defence and insurance. Higher capital inflows could help finance the current account deficit, estimated by the economic survey at 1%of GDP during 2015-16. The moves may facilitate the government's efforts to make India an easier place to do business. India is ranked 142 in the World Bank's latest Doing business index, while the government aims to break into the top 50 in the next two years. Source:economictimes http://economictimes.indiatimes.com/news/politics-and-nation/dipp-seeks-cabinet-to-hike-proposal-limit-to-rs-3000-crore-for-four-fdi-plans/articleshow/47116370.cms |
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