India’s FDI reforms to boost Ease of Doing Business

By Nandini Saxena |

The UK India Business Council welcomes the reforms-oriented amendments to the FDI policy, which reflects the Government of India’s strong commitment in creating a more open and robust economy and an encouraging investment climate. It will lay the foundation for rapid investments and faster economic growth by creating more headroom for foreign capital to come in giving a further boost to employment, job creation and technology share.

Commenting on the announcements by the Government Richard Heald, CEO, UKIBC said: “Important to note that between 2000 and 2015, the UK invested $22.2 billion into India – nine per cent of all FDI in the country, making the UK the largest G20 investor and about 535 UK firms operating out of India employ about 691,000 people in India. “

Some of the few significant reforms which were announced are:

Defence – India will now allow 100 per cent foreign investment in the defence industry, up from the current 49 pe rcent equity limit, in proposals that bring in ‘modern technology.’ The earlier additional condition of bringing ‘access to state-of-the-art technology’ was jettisoned.

Retail – the Indian government relaxed local sourcing norms up to three years for single brand retail trading of products that have ‘cutting edge’ technology.

Meanwhile, 100 per cent foreign investment is now permitted for trading in food products that are produced locally. This will now allow foreign companies to set up national grocery chains in India.

Pharmaceutical – foreign pharmaceutical companies can now invest up to 74 per cent automatically in existing brownfield projects, without government approval.

These announcements, coupled with reforms that look at accelerated infrastructure investment, less red tape, and the recently announced revised bankruptcy code, make India a more attractive investment destination for UK businesses; raising optimism about this market.


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