Department of Industrial Policy and Promotion Secretary Ajay Dua will have a more liberal FDI policy in the next few months.
MUMBAI: The government will have a more liberal Foreign Direct Investment (FDI) policy in place soon as a review of the country's FDI policy will be finalised in the next few months.
"The results of the review will be in the direction of liberalisation, as was the case with similar policy reviews in the past," Department of Industrial Policy and Promotion Secretary Ajay Dua said on Tuesday.
Speaking on the 'Investment Scenario in India' at the Plenary Session of a CII-sponsored seminar here, Dua outlined the growing attraction of India as an investment destination and identified six sectors that have tremendous potential.
These are automobiles and auto ancillaries, IT and IT-enabled services, pharmaceuticals, biotechnology, food processing and telecommunications.
Dua said FDI has started coming into the telecom sector in a big way now. In all these sectors, the basis for optimism about future growth stemmed from India's cost competitiveness and supply side strengths, including a large intellectual capital base and the expanding domestic market.
Dua said, India had deliberately followed a process of calibrated liberalisation of its FDI regime. Before 1991 FDI was allowed in selective sectors that up to 40 per cent.
This went up to 51 per cent under the automatic route for 35 priority sectors in 1991. In 1997 it was decided to allow up to 74 per cent in 111 sectors under the automatic route and 100 per cent in some sectors, he said.
In 2000, up to 100 per cent FDI was allowed under the automatic route in all sectors except a negative list. After 2000 more sectors have been opened up, equity caps raised and conditions relaxed, he said.
There were no restrictions on FDI in the manufacturing sector where up to 100 per cent FDI had been allowed, Dua added.
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