New Delhi Dated 23rd June (PTI): Government announces reforms in Foreign Direct Investment (FDI) in the key sectors of Defence, Aviation, Pharmaceuticals and Food Processing. The Prime Minister. Mr.Narendra Modi has expressed confidence,that with this decision the Indian market wouldopen up for FDI, and that in turn would boost the employment generation opportunities in the country. For defence, the Foreign Direct Investment limit has now been increased from 49% to 100%, which means India will now be able to access modern defence technologies for the country.
The decision regarding the reform of the FDI limits for the key sectors was taken at a high level meeting chaired by Mr. Narendra Modi. The government had earlier decided to reform the FDI in the month of November last year. In this meeting chaired by PM Modi, It was decided to relax some norms as that would facilitate to invite foreign direct investment in sectors like defence, aviation and single brand retail.
The reforms in FDI are being viewed as strategically important, as they would augment the foreign investment in the country. At the same time for making investments in India,seeking governmentpermissions would bemandatory. This decision enables India to have access to modern technologies available in the defence sector. The new technologies will have a positive effect on the country’s own security, as well as it would lead to a surge in the manufacturing of defence technologies within the country itself.
The decision of reforming FDI limits in the fastest growing sectors of Aviation and Pharmaceutical manufacturing would lead to positive transformation of these sectors. A limit of 100% FDI in food processing as well as e-commerce would have a futuristic impact.
The FDI limits in the Indian pharmaceutical manufacturing sector has been increased to 74%, which is considered to be beneficial for this sector.
Prime Minister Mr. Narendra Modi further announced on social media that with reforms in FDI, India is the world’s largest open economy for foreign investors.
According to a report published for the Financial Year 2016-17, the FDI in India has gone up by 55 million dollars, this is the highest FDI investment ever in the country.
The reforms in FDI are being viewed as a successful move by the government of India. The foreign investments agency has rated Indiaas a preferred destination for foreign direct investment.Only theforeign investors are appealing to the government officials to increase the pace of its investment programme and also to increase the FDI limit.
This decision is viewed as a revolutionary step. By reforming the FDI limits, India has invited huge amount of investments. While the Chinese economy is on the verge of decline, and the so called big countries are also currently struggling. TheIndian economy has been successful in attracting foreign investments and investors.
If the above statement holds true,then that indicates that the foreigninvestors have huge expectations from the Indian government. If the Indian government is able to fulfil the demands of the foreign investors, then it would attract huge foreign investments in the country. International investment organisations have applauded India on its achievement, at the same time they have suggested to speed up the development of the country.
The government is expecting positive reciprocation from foreign investors on this decision. Currently India is the only country which is able to attract huge foreign investment. In the near future, owing to these adventurous and aggressive decisions made by government, India would be marching ahead of other countries in terms of foreign direct investment.