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Bread #8860 / Post #6926567

2019-07-05T16:43:04Z Anonymous 6926567

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India considering relaxing foreign investment rules for several sectors

The Indian government on Friday said it will consider further liberalizing foreign direct investment (FDI) rules in certain sectors, part of its efforts to make Asia
s third-largest economy a more attractive investment destination.

Presenting the annual budget for 2019/20, Finance Minister Nirmala Sitharaman said the government would hold discussions with stakeholders to relax FDI rules in the aviation, media, animation and insurance sectors, and ease rules for single-brand retailers.

I propose to further consolidate the gains in order to make India a more attractive FDI destination,
Sitharaman said.

Broadening access to India
s economy for foreign investors could help Prime Minister Narendra Modi, who won a thumping election majority in May but is still battling a slowdown in economic growth and foreign inflows.

The government
s move to ease FDI rules is also seen aimed at assuaging concerns of foreign investors who have become wary of India
s investment climate of late, especially after new FDI rules for the e-commerce sector were seen as protectionist.

Sitharaman did not provide many details about the proposals, but there are plenty of clues about the directions the government may be heading in a government document, dated May 3, seen by Reuters. And they may be more ambitious than those made public on Friday.

That document outlined what it called the
justification
for easing FDI rules for seven sectors, including single-brand retail and insurance – which Sitharaman mentioned on Friday.

The document also laid out FDI proposals for digital media, contract manufacturing, coal mining, certain plantation crops and firms that store financial information for bankruptcy proceedings.

The proposals included the extension of FDI limits in some of the sectors, while easing rules for others. Told about the plans listed in the document, three senior Indian officials told Reuters last month the proposals had been in the works for some time.

At the time two top officials, Secretary of India
s industries department Ramesh Abhishek and Additional Secretary Shailendra Singh, told Reuters there were no FDI changes under consideration, calling Reuters findings based on the government document speculative. The industries department is the key ministry for FDI reforms.

Abhishek and Singh did not respond to a Reuters request on Friday seeking clarifications on their earlier remarks.

PROPOSALS OUTLINED

For the insurance sector, the government document proposed that investment of up to 74% should be allowed with necessary government approvals, above the current 49% limit that is allowed without approval under a so-called automatic route.

The move would come as a boost to firms such as Italy
s Generali Group, France
s AXA and U.S. insurer MetLife Inc (MET.N), which already operate joint ventures in India.

Explaining the rationale, the government document said the private banking sector was
financially more sensitive
but allowed up to 74% foreign investment, and so the limits for the insurance sector should be relaxed to provide parity.

Sitharaman on Friday said the government would allow 100% FDI in insurance broking and ease local-sourcing regulations for the single-brand retail sector – both proposals that were listed in the government document seen by Reuters. Multi-brand retailers, who would not be covered, would include department store companies selling a wide range of goods.

India considering relaxing foreign investment rules for several…

NEW DELHI (Reuters) – The Indian government on Friday said it will consider further liberalizing foreign direct investment (FDI) rules in certain sectors, part of its efforts to make Asia’s third-largest economy a more attractive investment destination.

china doing exact same thing

2019-07-05T16:43:04Z

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