Strongly favouring a hike in FDI cap to 100 per cent in the telecom sector, Commerce and Industry Minister Anand Sharma said on Sunday that he would soon move the Cabinet for further liberalisation in other sectors as well which hold potential for FDI inflows.
The minister also said that he would meet the Defence Minister on increasing foreign direct investment (FDI) ceiling in the defence sector.
"I am strongly in favour of raising the cap in telecom sector. I have discussed this with the Telecom and Finance ministers and once we have the proposal, we will move the Cabinet for raising the cap to 100 per cent, and also for FDI in defence," he told reporters.
He said his ministry wants global majors in defence sector to partner with both the PSUs and the private sector.
"...so that the big outgo of foreign exchange be brought down and domestic manufacturing improves," he added.
Mr Sharma said he will hold deliberations with Prime Minister Manmohan Singh for inviting more foreign investments in the defence and telecom sectors.
On retail, he said that he will chair a retail round table involving CEOs of Indian companies and foreign investors on June 27 here to seek views on implementation issues and to address their concerns, if any.
Mr Sharma would address global investors in different cities including London, Paris and St. Petersburg. He said that after the consultations, the government is likely to come up with clarifications and simplification of guidelines wherever required.
The DIPP has already once released clarification on mutli-brand retail sector.
FDI of up to 26 per cent is permitted in the defence sector. The cap in telecom sector is currently fixed at 74 per cent.
When asked whether he is satisfied with the clarifications issued by the DIPP, Mr Sharma said, "There is nothing which can be called perfect but at the same time we are accommodative and receptive... There are inbuilt flexibilities. Policy formation is a continuous process."
About his meetings with global investors, he said that he would explain the policy parameters to them and also hear from them about their expectations.
"...and if there are any issues where more clarity is required in the guidelines, the government is receptive to that and we will address it at the earliest," he said.
Mr Sharma clarified that investors in multi-brand retail have to invest in creating new infrastructure at the back end and acquiring existing infrastructure would not be counted towards fulfilment of condition of mandatorily investing 50 per cent in the back-end infrastructure.
"What is the philosophy of the policy is to create back end infrastructure and that is additional. Already created is not new creation... Therefore, what is existing cannot be qualified as an additionality. It has to be an additionality otherwise the philosophy or the spirit of the policy per se gets negated. Infrastructure needs to be created. India needs that," he said.
Mr Sharma also clarified that the first tranche of the mandatory 50 per cent investment have to be done in the creation of fresh back end infrastructure.
He said the ministry would continue the dialogue with the global investors to address their concerns.
"I will be addressing two investors summit in London and Belfast. In St Petersburg Economic Summit, global investors will be there and there is a dedicated session on India and thereafter in July, there is an investors meeting in Paris," he added.
The minister said that he would continue with his effort of conveying that India is an attractive investment destination and the government is welcoming and supportive of foreign investments.
When asked whether the DIPP has received any proposal in multi brand retail store he said, "Some of them already have identified there domestic partners. Twelve states have notified the policy, which states they want to invest in? These are business decisions to be made."
On the concerns being raised by the DIPP in FDI in existing pharma companies, Mr Sharma said, "We have some verticals in the pharma sector which are critical to the health security of the country and producing drugs which are meant for life threatening diseases."
"We would like to ensure that there is further enhancement in efficacy of medicines, new R&D and also additional capacity to be created to protect the situation where the existing production and the availability is not in any way diluting or threatened," the trade minister added.
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