India is planning to allow more foreign investment by relaxing limits in various industries in the year starting April 1 to help regain its lost position as the worldâ€™s fastest growing major economy.
The government will make it easier for foreign companies to seek approval and could ask ministries to clear investment proposals, Economic Affairs Secretary Shaktikanta Das said in an interview in New Delhi. These steps follow the governmentâ€™s decision this week to scrap the 1990-era Foreign Investment Promotion Board that was often criticized as a bureaucratic hurdle slowing projects and proposals.
â€œThe idea is to make process the simpler and faster,â€ Das said declining to name industries where foreign investment limits can be relaxed. Easing of limits is under the consideration of the government, he added.
India and China are renewing a push for globalization at a time when the UK and US are turning increasingly protectionist. With two of the worldâ€™s largest populations, the Asian economies and foreign companies need each other to create jobs and maintain sales growth.
FDI inflows between April-September rose 31 percent from a year earlier to $21.7 billion, Finance Minister Arun Jaitleyâ€™s advisers told parliament on Tuesday. Thatâ€™s still a fraction of roughly $118 billion received by China in 2016.
Prime Minister Narendra Modiâ€™s administration is trying to lure foreign capital to boost economic growth thatâ€™s set to slow to 7.1 percent in the year ending March 31 after hitting close to eight percent last year. The effort to boost expansion suffered a blow after the government withdrew high denomination banknotes in an economy where bulk of consumer transactions are done in cash.
There are foreign investment caps in over a dozen industries from banking to defense manufacturing which is often cited as a barrier to investment in worldâ€™s second most populous country. Apple Inc. is set to begin making iPhones in India by the end of April after a prolonged negotiation over the relaxation of a rule that requires single-brand retailers to source 30 percent of components from within India.
Das said he had no knowledge of any relaxation handed out to the maker of iPhones. The Finance Ministry did not find sufficient grounds to relax the rules for Apple to start retailing in India as the government was keen to boost local manufacturing, he said.