FDI plans gather pace
New Delhi: Moving forward on the proposal to raise the FDI cap across sectors, the Department of Industrial Policy and Promotion (DIPP) on Monday held meetings with various ministries on the issue.
A panel headed by economic affairs secretary Arvind Mayaram had last month recommended increasing the foreign direct investment (FDI) cap in the defence, telecom, multi-brand retail, insurance and pension sectors among others.
The ministries of information and broadcasting (I&B), telecom, space, civil aviation, petroleum and home attended the meeting on Monday. DIPP will be holding a meeting with the departments of pharma, mining, MSME and consumer affairs on Tuesday.
The government is looking to form some view on raising the FDI in various sectors before the monsoon session of the Parliament.
In the morning, commerce and industry minister Anand Sharma and finance minister P. Chidambaram discussed the issue of raising the FDI caps. In the past both ministers have indicated their willingness to hike FDI across sectors.
“We have discussed a whole range of issues with regard to trade deficit, exports, imports and FDI. Relaxing the FDI caps was also discussed. On this we will take an early view,” said Sharma after the meeting.
DIPP secretary Saurabh Chandra said that by July 5 all the concerned departments and ministries would send their views and the DIPP would submit a detailed report to Sharma by July 7.
“I&B would send its comments in a couple of days on raising the FDI cap in the print media. The telecom FDI issue is coming up before the telecom commission on Tuesday. The defence minister would be writing to our minister on the sector,” he said. The home ministry raised security issues in sectors like defence and telecom.
Chandra said the concerns of the ministry of home affairs have been “conveyed wherever raised to the different departments.” He said that FDI in many of these sectors requires a security licence.
“Representatives of the home affairs department were present in the meeting because they have concerns regarding I&B, telecom, defence, space and civil aviation,” he added.
The Mayaram committee, which was set up to review the sectoral caps, had suggested that the FDI ceiling in the defence sector be raised to 49 per cent under the government approval route from 26 per cent at present.
On the telecom sector, it recommended that 100 per cent FDI be allowed under the FIPB route as against 74 per cent. It wanted the government to retain 49 per cent FDI under the automatic route in the telecom sector.
Besides, it proposed to increase FDI cap to 74 per cent in multi-brand retail trading. In the civil aviation sector, the committee suggested 100 per cent FDI in non-scheduled air transport services under the automatic route as against 49 per cent.
It also proposed raising the cap to 49 per cent under automatic route in sectors like single-brand retail, existing pharma companies, PSU banks, print media, asset reconstruction firms and stock exchanges.
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