Libralised FDI policy in the offing

Mumbai, May 29 (UNI) The much-awaited liberalised policy in respect of foreign direct investment (FDI) in India will be announced by June-July.

This was indicated today by Dr Ajay Dua, Secretary, Department of Industrial Policy and Promotion (DIPP) in the Ministry of Commerce and Industry at a function here.

Speaking on ''Investment Scenario in India'' at the plenary session on ''GCC-India Investment Opportunities'' at the third meeting of the India-GCC Industrial Forum, he said FDI's policy review, which is underway, would be towards liberalisation, as was the case with similar policy reviews in the past.

Outlining the growing attraction of India as an investment destination, Dr Dua identified automobiles and auto ancillaries; information technology (IT) and IT-enabled services; pharmaceuticals; biotechnology; food processing; and telecommunications as areas of growth. India's cost competitiveness, supply-side strengths, including a large intellectual capital base, and the expanding domestic market are basis for further growth in these sectors, he added.

While defending calibrated liberalisation of its FDI regime, he, however, said there were no restrictions on FDI in the manufacturing sector where upto 100 per cent of it is allowed.

Before 1991, FDI was allowed selectively upto 40 per cent. But when the process of economic reforms began in 1991, FDI limit was raised upto 51 per cent under the automatic route for 35 priority sectors. Then in 1997 it was allowed upto 74/51/50 per cent in 111 sectors under the automatic route and 100 per cent in some sectors. In 2000, FDI upto 100 per cent was allowed under the automatic route in all sectors except a negative list. Since then, more sectors have been opened, equity caps raised and conditions relaxed further, he added.

FDI equity inflow into India upto January-2007 was 16.4 billion dollar, according to RBI data. With the addition of reinvested earnings, the total FDI inflow was USD 19 billion in 2006-07. UNI