Foreign Direct Investment (FDI).
Credit: PTI File Photo
New Delhi: India has recently relaxed foreign direct investment norms in the space sector and there is a possibility of further FDI liberalisation in certain other areas when the new government will come to power, a top official said on Saturday.
Secretary in Department for Promotion of Industry and Internal Trade (DPIIT) Rajesh Kumar Singh said that in the last few years, India has liberalised FDI policy in many segments.
India has one of the most liberal foreign direct investment (FDI) policies in the world and in fact more liberal than many Southeast Asian countries that the country is often compared with, he said.
Recently FDI norms were eased in the space sector and 'it is quite possible that under a new government, we can attempt some further liberalisation of any pockets that are left and where some liberalisation is possible,' Singh said here at CII's annual business summit.
The Lok Sabha elections are under way in the country and the counting is scheduled for June 4.
The government has eased FDI norms in the space sector by allowing 100 per cent overseas investment in making components for satellites, as part of efforts to attract overseas players and private companies into the segment.
FDI in India declined 13 per cent to USD 32.03 billion in April-December 2023, dragged down by lower infusion in computer hardware and software, telecom, auto, and pharma sectors, according to the government data.
Talking about the success of the production linked incentive schemes (PLI), the secretary said so far Rs 1.13 lakh crore of investments have come in and the beneficiary companies have recorded over Rs 9 lakh crore of sales, exports of Rs 3.45 lakh crore and created jobs for over 8 lakh people.
The scheme was announced in 2021 for 14 sectors, including telecommunication, white goods, textiles, manufacturing of medical devices, automobiles, speciality steel, food products, high efficiency solar PV modules, advanced chemistry cell battery, drones, and pharma with an outlay of Rs 1.97 lakh crore.
Singh said some people criticize the scheme stating that it has not led to increase in domestic value addition but they should know that it takes time.
People have raised issues with regard to India attracting players in the semi-conductor segment stating that it is too capital intensive and not suitable for India.
"The target is not labour intensity, it is mainly strategic and to ensure that we do not become over dependent on unsecured supply chains," he said.
On ease of doing business, he said they are working on the World Bank's Business Ready (B-READY) index for which the survey will start in August and this ranking involves a new set of indices which will cover ease of entry, ease of operation and ease of exit of business.
The World Bank has shared a set of 1,370 questions which will be assessed across various economies.
"Our survey starts in September. DPIIT along with various ministries is at work and trying to sort of first assess the situation and thereafter see whether we can make some quick reforms in certain areas to ensure that our overall performance improves," Singh said.
These rankings despite certain shortcomings have a signalling effect on foreign investors.
"We need to ensure that we do not regress and we continue to improve when it comes to those rankings," he said.
He added that the department is working on the second edition of Jan Vishwas law after getting inputs from industry associations.
"We have to do several rounds of these exercises to eliminate some of the vexatious and penal provisions that are unfriendly for business," the secretary said.
In the first edition of the Jan Vishwas law, over 180 provisions were decriminalised in 42 Central Acts administered by 19 ministries and departments. Under the first Jan Vishwas law, imprisonment and/or fine was removed in some provisions.
Some of the legislations that were amended included the Boilers Act, Indian Forest Act, Drugs and Cosmetics Act, Deposit Insurance and Credit Guarantee Corporation Act, Warehousing Corporations Act, Food Corporations Act, Patents Act, and Food Safety and Standards Act.
Further on the country's intellectual property rights (IPR) regime, the secretary said India has created a situation where its patent regime is meeting or getting close to global benchmarks in terms of patent examination time and approval.
The number of patents granted went up from 5,978 in 2014-15 to 1.3 lakh in 2023-24.
On how to enhance involvement of states in the reform process, he said 'there are some weapons that we have to nudge them in the reform areas that we feel are really important for the country'.