Norms to curb FDI inflows on cards

NEW DELHI: The government may want to scan FDI flowing in from its suspicious neighbours but the fact is that not a single penny has come in from China and Bangladesh over the last three years and Pakistan is yet to invest in India.
According to the official (published) data from the industry ministry, China has had a share of 0.025% (Rs 712.9 crore) in the total approvals of Rs 2,80,537 crore into India since 1991. On the other hand, Rs 0.5 billion has been approved from Bangladesh during the period which amounts to 0.001% of the total value for the approvals.
While China ranks 24th in the list of FDI contributors, Bangladesh is ranked at the 54th position. Maximum investment proposals, in terms of value, have come from the US, followed by Mauritius, UK, Japan, Korea and Germany.
The government has, however, decided to impose curbs on FDI from certain countries including China, Pakistan, Bangladesh and Sri Lanka on national security grounds. To be targeted at specific sectors like those related to defence and certain sensitive areas like Gujarat, the curbs will be made applicable even to cases which are currently being allowed through the automatic route.
The external affairs, finance, home, defence and commerce & industries are working on the modalities of the curbs. The final decision on these issues would be taken by the Cabinet Committee on Security (CCS) at a meeting to be held next month.
The government also plans to include the national security clause in all businesses outsourced by Central as well as state public sector undertakings. Introduction of these clause in global tenders floated by these organisations would help in eliminating organisations whose participation affects national security as well as defence considerations.
According to the regulations being formulated, steps would be devised to reject investment from individual citizens of China, Pakistan, Bangladesh and Sri Lanka in sensitive sectors. In case of companies based in these countries, the FDI level would be restricted to 49% in such sectors.
FDI from such sources would be denied permission if the location selected for the project is a sensitive area like northern Gujarat, Jammu & Kashmir, Himachal Pradesh, border districts of Rajasthan or coastal areas of Maharashtra.