NDA government opens the doors wide for foreign investments
New Delhi: The BJP-led government at the Centre has opened the doors for foreign investment in a number of sectors including defence. The decision, which has received criticism from most of opposition parties, seems to be aimed at nullifying the effect Reserve Bank of India governor Raghuram Rajan’s decision to go to teaching and research job after his term ends in September.
The other sectors where government on Monday invited foreign participation are civil aviation and pharmaceuticals. The decision changed the scenario in the Bombay Stock Exchange in favour of the investors at the end of the
Commerce and Industry minister Nirmala Sitharaman, however, said the announcement had nothing to do with the RBI governor's decision.
“We have been working on this for quite some time. We could not have done all this in one or two days”.
The decision taken at a high-level meeting chaired by Prime Minister Narendra Modi, also paves the way for companies such as Apple Inc to immediately set shop in India.
In defence, however, foreign investment beyond 49 per cent has been permitted through the government approval route. In other cases it is through the automatic route.
As far as civil aviation is concerned, a foreign carrier can only own upto 49 per cent stake in the venture, and the rest can come from a private investors including those based overseas.
“Today’s FDI reforms will give a boost to employment, job creation and benefit the economy. This is second major (FDI) reform after the last radical changes announced in November 2015,” the minister said.
“Now most of the sectors would be under automatic approval route,” adding that with these changes, India is now the most open economy in the world for FDI,” tweeted Modi.