DPIIT kickstarts exercise to ease FDI norms more

Economy


NEW DELHI: The Department for Promotion of Industry and Internal Trade (DPIIT) on Tuesday kickstarted an exercise to relax India’s foreign direct investment norms.

The department held an inter-ministerial meeting to discuss further opening up in sectors, especially where 100% FDI is not allowed on the automatic route. “This was an exploratory meeting… this is the start of the exercise,” said one official.

The department has asked ministries and departments to submit specific proposals wherever they seek scope for relaxation.

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The next meeting is likely in 2-3 weeks. The exercise comes two months after the government opened up FDI in contract manufacturing and eased norms for overseas investors in single-brand retail and coal mining.

At present, FDI is prohibited in nine sectors – lottery business; gambling and betting including casinos; chit funds; nidhi companies; trading in transferable development rights; real estate business or construction of farmhouses; manufacturing of cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes; atomic energy, and certain railway operations.

India also prohibits foreign technology collaboration in any form including licensing for franchise, trademark, brand name, management contract for lottery business and gambling and betting activities.

“The mandate is to identify sectors where FDI caps and norms can be liberalised because there are complicated issues in all sectors. We discussed which all areas can be considered for opening,” said another official



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