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More FDI reforms to be rolled out over next year: DIPP secretary

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Government is working on a set of reforms across sectors, says DIPP Secretary Ramesh Abhishek

Reforms in the (FDI) regime will continue, with the government set to bring changes to the norms over the next one year.


On Saturday, Department of Industrial Policy and Promotion Secretary Ramesh Abhishek said the government was working on a set of reforms across sectors.


Speaking at the annual general meeting of industry body CII, Abhishek did not, however, disclose the sectors that might see changes to investment rules; he said more than 90 per cent of all sectors were open.


“The government is focusing on the rules governing in various sectors.” a senior government official said.


Back in June, 2016, the government had announced relaxed norms in single-brand retail, civil aviation, airports, pharmaceuticals, animal husbandry and food products.


It had allowed up to 100 per cent in defence through the approval route, 100 per cent in food product e-commerce, 100 per cent in greenfield pharma via the automatic route, 100 per cent in brownfield pharma — of that 74 per cent through the automatic route — 100 per cent in scheduled airlines, and up to 49 per cent in airlines through the automatic route.


The government might also be looking to include the contentious multi-brand retail segment to this list.


This might be done by allowing food retailers to generate around 20-25 per cent of their sales from non-food items such as kitchen-use products or basic household requirements like toothpaste.


Currently, in multi brand retail trading, in all products, is permitted subject to a range of stipulations, which companies have termed difficult. A total 100 per cent is allowed in stores that sell only Made-in-India food products or locally produced farm goods.


Apart from Amazon which has committed to invest $515 million over the next 5 years, there have been no takers for the food retail business so far as several retailers are waiting for a further opening up.


Also, with the budget dismantling the Foreign Investment Promotion Board (FIPB), the entire policy architecture governing foreign investment also needs to be reviewed.


The rationale behind the move is that most is now on the automatic approval trajectory. Only an estimated seven or eight per cent of all sectors are under the approval route.


Commerce and industry minister Nirmala Sitharaman had hinted that in the absence of  FIPB, departmental regulators might suffice to decide. 


On the other hand, Ramesh Abhishek believes administrative departments could also be considered for taking the final call.

More FDI reforms to be rolled out over next year: DIPP secretary

Government is working on a set of reforms across sectors, says DIPP Secretary Ramesh Abhishek

Government is working on a set of reforms across sectors, says DIPP Secretary Ramesh Abhishek

Reforms in the (FDI) regime will continue, with the government set to bring changes to the norms over the next one year.


On Saturday, Department of Industrial Policy and Promotion Secretary Ramesh Abhishek said the government was working on a set of reforms across sectors.


Speaking at the annual general meeting of industry body CII, Abhishek did not, however, disclose the sectors that might see changes to investment rules; he said more than 90 per cent of all sectors were open.


“The government is focusing on the rules governing in various sectors.” a senior government official said.


Back in June, 2016, the government had announced relaxed norms in single-brand retail, civil aviation, airports, pharmaceuticals, animal husbandry and food products.


It had allowed up to 100 per cent in defence through the approval route, 100 per cent in food product e-commerce, 100 per cent in greenfield pharma via the automatic route, 100 per cent in brownfield pharma — of that 74 per cent through the automatic route — 100 per cent in scheduled airlines, and up to 49 per cent in airlines through the automatic route.


The government might also be looking to include the contentious multi-brand retail segment to this list.


This might be done by allowing food retailers to generate around 20-25 per cent of their sales from non-food items such as kitchen-use products or basic household requirements like toothpaste.


Currently, in multi brand retail trading, in all products, is permitted subject to a range of stipulations, which companies have termed difficult. A total 100 per cent is allowed in stores that sell only Made-in-India food products or locally produced farm goods.


Apart from Amazon which has committed to invest $515 million over the next 5 years, there have been no takers for the food retail business so far as several retailers are waiting for a further opening up.


Also, with the budget dismantling the Foreign Investment Promotion Board (FIPB), the entire policy architecture governing foreign investment also needs to be reviewed.


The rationale behind the move is that most is now on the automatic approval trajectory. Only an estimated seven or eight per cent of all sectors are under the approval route.


Commerce and industry minister Nirmala Sitharaman had hinted that in the absence of  FIPB, departmental regulators might suffice to decide. 


On the other hand, Ramesh Abhishek believes administrative departments could also be considered for taking the final call.

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Subhayan Chakraborty

Business Standard

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