Industry gives thumbs-up to government's FDI decisions

NEW DELHI: Government's decisions to relax limits for FDI in a dozen sectors are 'most timely' and will boost investor sentiments, India Inc said today.

"While industry looks forward to more, this revision of caps is a huge step in setting off these reforms," CII Director General Chandrajit Banerjee said in a statement.

On hike in FDI limit to 49 per cent for the insurance sector, the chamber said the move would unshackle insurance industry and drive orderly growth and long-term development of the insurance and pension sector in the country.

On defence sector, CII said that "critical concepts such as 'state-of-the-art' technology would need to be defined".

"Clarity and transparency needs to be ensured while allowing higher FDI," Banerjee added.

Assocham said the "welcome move" should be followed by easy rules on the mergers and acquisitions so that much needed consolidation in the insurance sector is facilitated.

It said the decision to allow 100 per cent FDI in telecom will surely help the sector as it will lead to some over seas investors taking interests in the existing debt ridden telecom companies.

FICCI said that it "welcomes the announcements for raising FDI caps" in telecom and insurance sectors and for enabling the possibility in defence.

"What India needs are JVs that enhance its strategic capabilities like 'Brahmos' which has catapulted India to the group of nations with supersonic cruise missile capabilities, with IPRs residing within the country giving it export potential," FICCI President Naina Lal Kidwai said.

"It is the transfer of 'Know Why' that is crucial in an alliance ensuring that the technology transfer has empowered India's defence capabilities," Kidwai said.

KPMG (India) Partner-telecom Jaideep Ghosh said the new norm on telecommunication segment, announced yesterday by Commerce and Industry Minister Anand Sharma, is a positive step towards economic growth, especially in the current depressed situation.

"The timing is appropriate. This is expected to boost investor sentiments and address the prevailing current account deficit," Ghosh said.

CII said the industry has given thumbs-up to fast-tracking of FDI in PSU oil refineries, commodity bourses, power exchanges, stock exchanges and clearing corporations under automatic route.

Further, industry bodies are looking forward to Government's decision on FDI limits in sectors like civil aviation, construction and real estate, information and broadcasting and media, banks and multi-brand retail.

The government yesterday announced to further liberalise FDI norms and caps in about dozen sectors.