India Inc. hails government's new FDI norms

New Delhi: India's move to open up its industry to more foreign investment in nine sectors, including aviation, defence and pharma, has evoked wide praise from India Inc. and other stakeholders. Here are India Inc.'s views: Chandrajit Banerjee, Director General, Confederation of Indian Industry (CII): Liberalisation of the foreign direct investments (FDI) regulations reflects the government’s commitment to reforms and openness, and reassures investors that ease of doing business remains high priority. Taken together, the FDI rules announced today will attract big new investments across key sectors such as food processing, defence production, pharmaceuticals and civil aviation, among others, thereby adding to growth and employment. Didar Singh, Secretary General, Federation of Indian Chambers of Commerce and Industry (Ficci): Simplification in the policy framework governing investments in a whole host of sectors, including strategic sectors like defence and aviation, is a huge positive for the economy. The Modi administration through these moves has once again highlighted that reforms is a continuous process in order to capitalise the potential India offers. D.S. Rawat, Secretary General, Associated Chambers of Commerce of India (Assocham): The government's bold decision to increase FDI cap to 100 per cent will help India in realising the dream of self-reliance in the defence sector which has immense possibilities for attracting investments, setting up manufacturing facilities, obtaining technologies and capabilities and generating high skilled employment. It will also help in bringing investment and advanced technology into defence sector thereby leading to inflow of capital and setting up entities of original equipment manufacturers and their suppliers through transfer of technology. Kiran Mazumdhar Shaw, Chairperson and Managing Director, Biocon: This is a very welcome step by the government, it is a long awaited reform. And I think the pharma sector is a flagship sector of India. And it is in dire need of capital investment. Kanchana TK, Director General, Organisation of Pharmaceutical Producers of India: We welcome government’s decision to make changes to the FDI policy. We believe that this will provide an impetus to employment and job creation in India. The decision to permit upto 74 per cent FDI under automatic route in brownfield pharmaceuticals and continuing with government approval route beyond 74 per cent will augur well with our members who are constantly exploring ways of ensuring new drugs and medicines are made available to Indian patients. S.V.Veerramani, President, Indian Drug Manufacturers' Association: Foreign investors were reluctant to invest in India owing to the delays in getting the government approval in greenfield projects. They were interested in brownfield projects. Now there will be more FDI inflows in the pharma sector. We expect FDI inflow of around $3 billion, but over a period time. Kalpesh Maroo, Partner, BMR and Associates LLP: The policy is a significant step forward as FDI in retail trade (multi brand retail as well as for single brand retail) in general has hitherto been subject to several conditions. Only possible dampener on this is that the demand of the industry to allow restricted retailing of essential commodities along with food products does not seem to have been accepted. Sreedhar Prasad, Partner, E-commerce, KPMG in India: This initiative could bring in investments in food infrastructure in India by the global players and provide for a platform to them to sell those products manufactured in India, thus opening up the Indian food market. Further, this could enable some of the existing e-commerce players to attract FDI in food category where they are selling only products manufactured or produced in India. Girish Vanvari, Head of Tax, KPMG in India: Coming at the back of the draft GST bill last week, the government’s move to ease the FDI regime is well timed and sends out a signal of confidence in the Indian economy. It actually opens up the country to the global world. Peeyush Naidu, Partner, Deloitte India: While the increase in FDI for aviation is welcome as it will allow flexibility, we are unlikely to see investors suddenly rushing to invest in airlines just because the cap of 49 per cent has been removed.