The decision of Foreign Investment in Defence Sector up to 100%was taken at a high-level meeting chaired by Prime Minister NarendraModi on June 20, 2016. This is the second major reform after the last radical changes announced in November 2015 when government eased policy in 15 sectors. With these changes, India is now the most open economy in the world for FDI. In last two years, Government has brought major FDI policy reforms in a number of sectors viz. Defence, Construction Development, Insurance, Pension Sector, Broadcasting Sector, Tea, Coffee, Rubber, Cardamom, Palm Oil Tree and Olive Oil Tree Plantations, Single Brand Retail Trading, Manufacturing Sector, Limited Liability Partnerships, Civil Aviation, Credit Information Companies, Satellites- establishment/operation and Asset Reconstruction Companies.
Measures undertaken by the Government have resulted in increased FDI inflows at US$ 55.46 billion in financial year 2015-16, as against US$ 36.04 billion during the financial year 2013-14. This is the highest ever FDI inflow for a particular financial year. However, it is felt that the country has potential to attract far more foreign investment which can be achieved by further liberalizing and simplifying the FDI regime. India today has been rated as Number 1 FDI Investment Destination by several International Agencies. Accordingly the Government has decided to introduce a number of amendments in the FDI Policy. Changes introduced in the policy include increase in sectoral caps, bringing more activities under automatic route and easing of conditionality for foreign investment. These amendments seek to further simplify the regulations governing FDI in the country and make India an attractive destination for foreign investors.
BY: ANKIT RAJPUT
A COMPREHENSIVE WEBSITE FOR ALL LEGAL DEVELOPMENTS