FDI policy liberalised, 100% FDI now in retail, construction

FDI policy liberalised, 100% FDI now in retail, construction

These are meant to liberalize and simplify the FDI policy so as to provide ease of doing business in the country.

The Government, on the other hand, has pushed the proposal with a view to provide an investor-friendly climate to foreign players and in turn attract more FDI to boost economic growth, which it expects will create jobs.

The decision to allow foreign airlines to invest up to 49 per cent under approval route in Air India comes in the backdrop of governments plans to disinvest the state-owned carrier.

The government also relaxed foreign direct investment (FDI) policy for medical devices and audit firms associated with companies receiving overseas funds.

It is rather more sad that the set of people making forceful arguments against FDI in retail from 2010 to 2014 became instrumental in bringing FDI in Retail this time.

Anshul Gupta, Research Director at Gartner India, said that the latest decision "removes systemic friction and will allow global brands to speed up investment to begin operations sooner". Earlier, the Government has introduced multiple changes in FDI policy for defence, insurance, construction development, pension, civil aviation, broadcasting, trading and pharmaceuticals. Congress communications in-charge Randeep Surjewala alleged that by doing away with the requirement of 30 per cent sourcing through Make in India, the Prime Minister has "exposed his duplicity and doublespeak" on the issue.

However, he said, it was expected that the government's liberalisation of FDI norms for multi-brand retail would enable large worldwide retail chains to invest in the country and bring latest technologies and retail formats into India. As the real estate business has been crippled, allowing 100% FDI under the automatic route for real estate broking services can help matters. It remains an unfinished agenda for the government.

"Allowing 100 per cent FDI in single-brand retail trade will further increase the hardship of traditional retail trade sector which is the second biggest livelihood giver after agriculture and expedite the ruin of the traditional retail trade sector", Sen said.

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