“Many countries are protecting their domestic industry from opportunistic takeover at a time when valuations are down. It is good if you can bring some restrictions so that companies do not get into hands of certain buyers who would exploit the situation,” Goyal told TOI in an interview.
Asked if India had opted to impose checks only for investment from neighbouring countries, the minister said, “The primary focus is that critical sectors remain under domestic ownership. FDI and FPI flows will be watched carefully,” he said, without naming China.
The government had recently put investment from countries with which India shares borders under the approval route, a move that was aimed at scrutinising investments from China. The finance ministry is also in talks with Sebi and the RBI to see if similar checks can be imposed in case of FPI (foreign portfolio investment) flows.
In fact, for the government, tapping investors looking at options outside China is another focus area as it seeks to ramp up domestic production.
Goyal said the building blocks are already in place, with the Narendra Modi government announcing a sharp reduction in corporation tax, while announcing a series of steps to open up the economy through reforms in mining, agriculture and industry. “The commerce and industry ministry is also working with stakeholders and has identified 12 sectors with a huge potential for exports or sectors where import substitution is possible.”
“Despite Covid, people are willing to invest top dollar. There is a lot of positivity, given that the PM has demonstrated to the world that India is a dependable trading partner,” the minister said.
He said that after the lockdown, there were sufficient signs of a pick-up in economic activity and pointed to power consumption coming back, while consumption of industrial oxygen was almost 80% of last year’s level. Exports which had fallen by a massive 60% in April, are estimated to be 30-55% lower in May and could be down by 10-15% in June, he added. “Industry is ramping up quite rapidly… If we play with the current trajectory, India will come out faster. We have lost two valuable months and there is certainly a lot of stress on a lot of parameters. There will be near normalcy in June. We will work with the states and stakeholders to see how we can catch up in the remaining nine months… You can’t see overnight normalcy, it will be gradual.”
He said the Atmanirbhar Bharat package’s thrust to provide credit to small businesses, along with several reform initiatives, will help business emerge from the recent impact of the lockdown.
Asked about trade deal with the US, the minister said a lot of issues had been sorted out during US president Donald Trump’s India visit and some mails were also exchanged before the lockdown kicked in. “Covid caused a collateral damage to what was agreed.”
The minister said railways, which is his other charge, will continue with its investment plans and said the private sector will play a major role in running new trains and in setting up new lines for freight and passenger traffic movement. “The vision is to invest Rs 50 lakh crore over the next 12 years and elaborate work is going on.”