FDI reforms likely to spur investments in 2013 courtesy 'animal spirits'
Foreign institutional investors (FIIs) were also allowed to invest up to 23 per cent in commodity exchanges without seeking prior approval of the government.
Among the decisions, FDI in multi-brand retail came in limelight as the government hard to strive hard to get the better of opposition in the Parliamentary debate that entailed voting on the issue. This decision will allow global retail giants like WalMart to open stores in India.
FDI ceiling in asset reconstruction companies has been increased to 74 per cent from 49 per cent, a move aimed at bringing more foreign expertise in the segment. At present, there are 14 ARCs in the country, of which nine have no foreign investment. ARCIL, a public sector ARC, is handling about 60 per cent of the asset restructuring business in the country.
Further, the government also took steps to discourage import of sub-standard machinery. It has decided to withdraw the facility of giving equity in lieu of import of second hand equipment.
The Department of Industrial Policy and Promotion (DIPP), which looks after FDI-related matters, also decided that the consolidated FDI circular will be announced every year instead of six-monthly basis. The next policy would be announced on March 29, 2013.
As part of its long-term vision, the DIPP has plans to raise India's share in the global foreign direct investment to 5 per cent by 2017 from 1.3 per cent in 2007 by streamlining policies for attracting investments.
Since in a globalised economy manufacturers have the choice to locate in any part of the world to get a competitive advantage, "DIPP will aim at sustaining this preferred location status for India," it has said.