India Inc hails FDI norms; Sitharaman says defence FDI will not compromise India's security
Welcoming the government's move, India Inc hailed Modi for his decision.
Government on Monday relaxed Foreign Direct Investment (FDI) norms in a host of sectors including civil aviation, single-brand retail, defence and pharma by permitting more investments under automatic route.
The decision to further liberalise FDI regime with the objective of "providing major impetus to employment and job creation in India" was taken at a meeting chaired by Prime Minister Narendra Modi.
Modi hailed a sweeping liberalisation of rules on foreign direct investment, saying they would make Asia's third-largest economy the most open in the world.
"Key reform decisions were taken at a high level meeting chaired by the PM, which makes India the most open economy in the world for FDI," PMO tweeted.
Key reform decisions were taken at a high level meeting chaired by the PM, which makes India the most open economy in the world for FDI.
— PMO India (@PMOIndia) June 20, 2016
Centre has radically liberalized the FDI regime, with the objective of providing major impetus to employment and job creation in India.
— PMO India (@PMOIndia) June 20, 2016
In a second tweet, PMO said the changes would provide a "major impetus to employment and job creation in India."
Welcoming the government's move, India Inc hailed Modi for his decision. Here's what they said:
Manufacturing and job generation will get a boost by the latest round of liberalisation in Foreign Direct Investment (FDI) norms that include doing away with dual clearances, Economic Affairs Secretary Shaktikanta Das said.
"With this (FDI) liberalisation, we expect manufacturing activity to come in...more activity in defence products. The driving force behind the whole thing is that all this investment should facilitate creation of jobs," he told reporters.
With the Centre approving 100 percent Foreign Direct Investment (FDI) in the defence sector in a bid to encourage 'Make in India' and boost the investment inflow into the country, Minister of State for Commerce and Industry Nirmala Sitharaman said the process has been eased out, but not at the cost national security.
"In Defence Sector, 100 percent FDI is possible because we have not touched any of the national security related requirements. They will still have to comply with every one of those requirements. We have not relaxed the norms on nation security or internal security related norms. We are inviting state-of-the-art technology and want investments to come in," she added.
Terming the simplification of policy framework governing investments in strategic sectors like defence and aviation as a "huge positive for the economy", Ficci Secretary General A Didar Singh said: "The Modi administration through these moves has once again highlighted that reform is a continuous process in order to capitalise on the potential India offers." Singh felt that "there is no doubt that India today is the most preferred investment destination in the world. While the attraction of our market is known to all, there is now even more reason for global investors to commit themselves for making and doing business in India".
"Liberalisation of the FDI regulations reflects the government's commitment to reforms and openness, and reassures investors that ease of doing business remains a high priority," Chandrajit Banerjee CII Director General said.
"Taken together, the FDI rules announced today will attract big new investments across key sectors such as food processing, defence production, pharmaceuticals and civil aviation, among others, thereby adding to growth and employment."
Assocham Secretary General D S Rawat said the decision will help in bringing investment and advanced technology into the defence sector, potentially leading to inflow of capital and setting up of entities of original equipment manufacturers (OEMs) and their suppliers through technology transfer.
The Organisation of Pharmaceutical Producers of India (OPPI) said, "We welcome (the) government's decision to make changes to the FDI policy. We believe that this will provide an impetus to employment and job creation in the country," OPPI Director General Kanchana TK.
(With PTI inputs)