While the current pandemic has taken its toll on the economy and industries globally, the reforms under the Self-Reliant India Movement promise to be a silver lining for foreign investment for India's post Covid-19 economy.
We are
laying a red carpet for all global companies to come and establish their
presence in India. Very few countries will offer the kind of opportunities
India does today,” said PM Narendra Modi.
The
government has announced various structural reforms across eight key sectors
including coal, minerals, defence production, civil aviation, power
distribution and atomic energy. The reforms are intended to benefit multiple
sectors with the help of simplified policies to assist foreign investors,
realise the potential of the sector, invite new participation and investment,
generate employment opportunities and boost overall economic growth.
The
government has also stated that fast-track clearance will be given through an
empowered group of secretaries and a project development cell constituted in
each government ministry will coordinate with investors and government at
federal and state level.
A few reforms are -
- Until recently, under the Foreign Investment Policy, the sectoral cap for foreign investment in an Indian entity engaged in the defence sector was 100 per cent with investment beyond 49 per cent being subject to government approval. However, under the economic stimulus package, the government proposes to raise foreign investment limits in an Indian defence sector entity from 49 to 74 per cent under the automatic route, with the objective to invite greater foreign investment.
- Under the Foreign Investment Policy, 100 per cent foreign investment is permissible in an Indian entity establishing greenfield pharmaceuticals manufacturing facilities and foreign investment in an Indian entity having facilities for manufacturing of pharmaceuticals products is permitted up to 74 per cent under automatic route and beyond 74 per cent under approval route. The scheme is intended to promote more foreign investment in this sector aiming to earn huge profits.
- The
government launched an auction for commercial coal mining on 18 June 2020
wherein terms and conditions and the entry norms are liberalized. New companies
are allowed to participate in the bidding process and 100 % FDI through the
automatic route is permitted in Indian entities engaged in coal and minerals
mining in India, excluding atomic minerals. The government is also planning to
boost growth in the mineral sector, by offering 500 mining blocks through an
open and transparent auction process.
- In
order to provide a surge in investment and incentive's these companies to shift
their production to India, the government is making changes to its industrial
and sectoral policy, introducing long impending labor, land and tax reforms,
and working towards fast track clearances and the streamlining of processes.
These reforms
widen the gates for foreign investments in Indian engaged in defence
manufacturing and encourage global defence equipment manufacturers to set up
production hubs in India.
While the
current pandemic has taken its toll on the economy and industries globally, the
reforms under the Self-Reliant India Movement promise to be a silver lining for
foreign investment for India's post Covid-19 economy.
To know more about prospects of starting a business in the Indian
market, get in touch with us on –
Website: https://www.makinindia.in/
Email ID: info@makinindia.in.
Call us on: +91
8828461868
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