The industry ministry on Monday proposed foreign direct investment up to 74 per cent in the defence sector from the present 26 per cent, stating urgent upgrade of equipment in the armed forces was needed as a bulk of them suffered from obsolescence.
India is one of the largest defence importers.
Defence Minister A K Antony has shot down Commerce Ministry's proposal to raise Foreign Direct Investment in defence from 26 per cent to 49 per cent, saying it will be a "retrograde" step and "stymie" the growth of the domestic industry while increasing dependence on foreign manufacturers.
The government does not propose to permit foreign direct investment in retail business, Commerce Minister Arun Shourie assured the Lok Sabha on Monday.
Global funds, according to Christopher Wood, global head of equity strategy at Jefferies, are now beginning to pay more attention to India with the market now offering 30 companies with a market capitalisation over $25 billion.
It is assumed that the growing worry over slowing down of economic growth had prompted the government to act.
Broad consensus is emerging within a Group of Ministers chaired by finance and external affairs minister Pranab Mukherjee on a proposal seeking comprehensive changes in the foreign direct investment policy. This includes scrapping automatic approval in sectors that have FDI limits and in which ownership or control is shifting to a foreign company, and a new definition for calculating indirect foreign equity.
Accusing the opposition of spreading misinformation regarding policy initiatives taken by the United Progressive Alliance government, a combative Prime Minister Manmohan Singh on Sunday said reform measures, including FDI in retail, will benefit the common man and create more jobs.
"AAP has done a fabulous job highlighting corruption and governance issues and have a good platform for that, but their economic platform is very scary," Venktesh Shukla, president, The Indus Entrepreneurs Silicon Valley, the largest TiE chapter, told Rediff.com. "Valley investors are watching India minutely; the next few months are very crucial for Silicon Valley investors."
Amid a debate within the government on allowing foreign direct investment in multi-brand retail, the nodal consumer affairs ministry is insisting on a foreign direct investment cap of 49 per cent in the sensitive sector, sources said.
In a dramatic turn of events in May 2019, an Emirates aircraft en-route to Dubai was asked to stop while it was taxiing for a take off in Mumbai. The pilot was given no reason and ordered to immediately return to the parking bay. As the aircraft returned to the terminal, two passengers from the first class - Naresh Goyal and his wife Anita - were offloaded by the immigration authorities, who said the duo cannot leave the country. Goyal, founder of Jet Airways, was stunned. The man, who ruled the aviation sector for two and a half decades with an iron hand, did not expect to be offloaded in this fashion.
The government is likely to announce significant policy measures relating to allowance of foreign direct investment (FDI) in the multi-brand retail segment, even as the Department of Industrial Policy and Promotion (Dipp) under the Ministry of Commerce and Industry is giving final touches to the draft report prepared by an inter-ministerial committee.
In ideologically discordant notes within Aam Aadmi Party, Captain Gopinath, pioneer of low-cost airline business, slammed the decision of AAP government in Delhi to reject FDI in retail, saying the party is "running in danger" of being branded like other parties of resorting to cheap and populist measures.
May include 'influencing a company's major policy decisions' in the current meaning.
A panel headed by Economic Affairs secretary Arvind Mayaram had suggested FDI limit be raised to 49 per cent in almost all sectors through the automatic route.
During the 10-months of this financial year, the highest FDI came in services ($1.80 billion), followed by pharmaceuticals ($1.26 billion), automobiles ($1 billion) and construction development ($966 million).
'If you are going to have only a handful of telecom players on whom the entire dream of Digital India rests, it's important they are financially sustainable.'
Ministry officials said the matter is being reviewed with the objective of bringing down the FDI cap from 100 per cent to 26 per cent in line with the limit for news media. This decision for the review was taken while discussing the proposal of US-based Dow Jones and Company for setting up a wholly-owned subsidiary to carry out publishing the facsimile edition of Wall Street Journal in India.
This means the cable companies engaged in last-mile distribution of TV channels will qualify for the existing 49 per cent FDI limit, while operators of DTH, HITS, IPTV and multi-system operators will be able to bring in up to 74 per cent FDI, a limit proposed by broadcast regulator Telecom Regulatory Authority of India.
The IRDA favours for a hike in FDI cap from 26 to 49 per cent and amendments in legislations to enable greater flexibility in investment.
Demanding withdrawal of the decision, the Communist Party of India said the government had opened up telecom sector when the country was 'yet to overcome the loot and losses due to 2G spectrum scam'.
A bench of Chief Justice N V Ramana and Justice Manmohan issued notice to Civil Aviation Ministry, DGCA and others and sought their response by October 30.
Addressing the BRICS investment seminar in Mumbai ahead of the 5-nation Summit in Goa on October 15-16, Jaitley said the government has put FDI on automatic route in almost 90 per cent of the areas that are eligible for foreign direct capital.
Dismayed by the BJP's decision to say no to FDI in multi-brand retail in its election manifesto, India Inc has urged the party to reconsider its stand, saying the move may send a wrong signal to overseas investors.
The government is considering a proposal to allow 100 per cent foreign direct investment into the country's defence sector, despite stiff opposition from the defence ministry that has raised security concerns.
The finance ministry is arriving at a consensus to reject a proposal mooted in government to permit foreign direct investment (FDI) in multi-brand retailing.
The government's decision to completely open FDI in single brand retail is unlikely to have any significant change as foreign firms will be deterred by the 30 per cent sourcing clause, say industry players.
The government on Tuesday indicated that it was open to changing FDI norms for multi-brand retail sector, saying policies 'are not cast in stone'.
Finance Minister Pranab Mukherjee said that the government will have to find some solution to the feisty issue of opening up of retail sector for FDI.
With a growing penetration of the Internet, which reaches to rural areas of the country, the retailers would be able to deepen their market
There is unlikely to be a rush towards the country unless New Delhi is ready with fairly applied regulations.
Apple's online launch is a symbol of success for FDI in single-brand retail, though there's no indication of how much the Silicon Valley major would invest in the country.
E-commerce players may soon rent out drones, so you can use them the way you book a cab on an app, and test viable use-cases for last-mile delivery.
Prime Minister Narendra Modi on Thursday suggested the G20 trade ministers to work collectively to ensure equitable competition between large and small sellers as there are challenges in the fast growing cross-border e-commerce. In a video message at the G20 Trade and Investment Minister's meeting here, he also emphasised on the need to address the problems faced by consumers in fair price discovery and grievance handling mechanisms. "Digitising processes and use of e-commerce have the potential to enhance market access. "I am glad that your group is working on the 'High Level Principles for the Digitalization of Trade Documents'. These principles can help countries in implementing cross-border electronic trade measures, and reduce compliance burdens.
The Department of Industrial Policy and Promotion (DIPP) has finally sanctioned the proposal of allowing foreign direct investment (FDI) from Pakistan. But the final notification will be issued by the Reserve Bank of India (RBI) within the next couple of weeks. The move will be unprecedented in the bilateral trading relations between both the nuclear-armed neighbours.
It has been waiting in line with other global retailers like Carrefour and TESCO to tap the growing and lucrative Indian market.
Finance Minister Nirmala Sitharaman on Tuesday sought to know from industry what is holding it back from investing in manufacturing, even though foreign investors show confidence in India. Drawing parallel between India Inc and mythological character 'Hanuman', Sitharaman said the government is willing to engage with the industry and take policy action. "This is the time for India... We cannot miss the bus," she added.
"We have examined the Bharti-Wal-Mart joint venture and everything is in conformity with the existing policy on FDI in retail," high-level sources in the commerce and industry ministry said.
Foreign inflows, in August 2012, had declined by 20 per cent to $2.26 billion after registering an increase in July at $1.47 billion.
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