'Press Note 18 mars investor interest'

NEW DELHI: The Assocham has suggested the government to review Press Note 18 in such a manner that its stringent clauses are diluted to ensure a smooth inflow of foreign capital into the country and protect the commercial interests of the domestic industry.

In a communication to the commerce & industry minister, Kamal Nath, the chamber has urged for evolving a mechanism which allows joint venture partners to resolve differences as per their discretion.

The chamber is of the view that when domestic policy has been increasingly allowing investments under automatic approval and also allows foreign companies to hold 100% equity share in many sectors, a regulation like Press Note 18 which ‘disallows’ automatic approval of new foreign investment is an anachronism and acts as a deterrent to investor interest in the country.

The chamber has advised the ministry to take extra precautions so that artificial barriers are not created under any circumstances while reviewing stipulations of Press Note 18 to discourage business activities in India.

The chamber is of the view that in any joint venture agreement, the stake holders should be allowed to take independent decisions for expanding their businesses. Also, a three-year cooling off period be given to the existing partner to decide his future course of action.