The government will continue to open up different sectors of the economy to foreign direct investment (FDI), commerce and industry minister Anand Sharma said on Wednesday.
He did not share details about the sectors identified for liberalisation, but government sources said railways, pharmaceuticals and real estate may well be thrown open to foreign investment.
The Department of Industrial Policy and Promotion or DIPP is working on allowing FDI in high-speed trains and other projects, including development of rail lines between project sites and existing network.
In the construction sector, the government is considering change in norms related to built-up area of the projects, capitalisation and lock-in period of investment via FDI.
The current guidelines require a minimum built-up area of 50,000 square metres, and a minimum capitalisation of $10 million.
Shama said that the decision to liberalise sectors like civil aviation, retail and telecom was bold and “the government will continue its endeavour for liberalising the FDI policy further in the coming weeks to ensure that India retains its leadership position for attracting foreign investments”.
In July 2013, the government had announced a raft of investor-friendly measures to woo overseas funds by easing FDI caps in 13 sectors like insurance, commodities, stock exchanges, telecommunications, courier services, tea, defence production, asset reconstruction companies and, credit information companies.
Sharma said that the coming months will see a greater push for development of industrial corridors across the country and work will commence for the establishment of the first few cities along the Delhi-Mumbai Industrial Corridor (DMIC).
The DMIC project entails investment worth $90 billion along the Delhi-Mumbai Rail Freight Corridor. Japan is providing financial and technical aid for the project, which will cover seven states totalling 1,483 km.
On the export front, Sharma expressed optimism. “Despite weak demand in traditional markets, exports have done reasonably well and in the first eight months of the current financial year, exports touched $204 billion, registering a growth of over 6% over the same period last year.”
He also emphasised that the government had been able to control the trade deficit in the past few months.
The government has been able to bring down the trade deficit to $99.9 billion so far as against $129 billion during the same period last year.
In 2013, India was rated as the most favoured investment destination globally, he said, adding “the decisions of the government have resonated with the global community and we have seen results in the last few months”.
During April-October this fiscal, India attracted FDI worth $12.6 billion, a decline of 15% over the same period last year.
“I expect that with greater foreign investment and technology collaborations, Indian manufacturing will also move up the value chain and acquire greater competitiveness globally,” Sharma said.
—With inputs from agencies