New alternative to FIPB vital to attract $8-b FDI

within just a month of being set up, the high-powered steering committee on foreign direct investment under the chairmanship of n k singh, member, planning commission, has arrived at the conclusion that the country needs an alternative to the fipb if it indeed wants to raise fdi levels to $8 billion a year as outlined in the tenth five year plan. speaking to et, n k singh said the committee was in the process of formalising a report suggesting the creation of a separate legal entity to replace the fipb. a draft bill, similar to those of andhra pradesh and karnataka to bridge the existing hiatus between the jurisdictions of the states and the local bodies, and incentives in the special economic zones to provide preferential treatment to foreign investors are also likely to form a part of the overall reform package. consensus on this at the committee's third meeting, was arrived at after reports by a t kearney, amcham/mckinsey and a joint study of harvard university and boston consulting group (based on the in-depth interviews of 28 senior mnc executives across the globe), pointed towards an urgency to address the first funnel of screening to attract fdi. govindarajan, the secretary, department of industrial promotion and policies, also agreed at the meeting that while the gap between the approvals and actual inflows had been reduced in recent years, there was no denying that the potential of fdi inflows is much greater and that india was getting screened out at the very first stage of decision-making by foreign investors. the new legal entity will be modeled along similar organisations in other countries like malaysia, brazil, korea and canada, said these single window organisations offer strong overseas marketing services, provide information on investment opportunities and procedures, a single-stop approval system and a disputes settlement mechanism. the committee is now examining the prospect of dismantling the fipb and the fiia (foreign investment implementation authority) and remodeling it along similar lines. committee member and cii director-general tarun das emphasized that in malaysia, for example, the malaysian industrial development authority the one-stop centre for investors has 15 overseas offices and 13 state offices in malaysia to render operational help and assistance to approved fdi projects, while the fipb does not even have one overseas marketing office. the committee was set up with the mandate to suggest policy and governance reforms necessary to attract private investment, both domestic and foreign. in order to do this, it is first identifying factors which inhibit higher fdi inflows and examine policy reforms towards mergers and acquisitions for attracting fdi. policy reforms will pertain to changes in the institutional apparatus both at the centre and states as well as in export processing zones. government is also looking to make india an attractive investment destination for nri's and the committee's report, which is scheduled to be submitted in november, will address this concern. the committee will examine all the factors responsible for the success of other countries, especially china, in attracting fdi before making its final recommendations.

New alternative to FIPB vital to attract $8-b FDI

WITHIN just a month of being set up, the high-powered steering committee on foreign direct investment under the chairmanship of N K Singh, member, Planning Commission, has arrived at the conclusion that the country needs an alternative to the FIPB...

More from our Partners

Popular Categories

Hot on Web

In Case you missed it

Top Searched Companies

Latest News

Download ET APP

Follow us on

become a member