Government to ease investment norms to boost FDI Inflows

Government to ease investment norms to boost FDI Inflows  

The government is open and welcomes suggestions to attract more investment in India. On Tuesday,  senior government officials said the government’s approach would remain ‘balanced’.    

​The official said, “We are open to all suggestions regarding investment in India, easing the investment climate in our interest. We have to carefully take every decision so that the nation’s interest is balanced with ease of doing business.”  

The Ministry of Commerce held a meeting with several industry representatives and other stakeholders to reassess and reshape the investment regime in India and to ensure a better inflow of foreign direct investment (FDI), said Ministry sources. A three-hour closed-door meeting took place on Tuesday, with major venture capital funds and financial regulators.

​One of the top officials said the government is also open to suggestions related to Press Note 3. On Friday, there was also a meeting at the Prime Minister’s Office (PMO) to review Press Note 3 (PN3), a key policy governing foreign direct investment (FDI) from India’s neighbouring countries.

​Came into existence in April 2020, PN3 mandated that any FDI from countries with which India shares a land border- or where the beneficial owner of the investment is based in such countries, a prior government approval would be mandatory.

​The discussion, attended by senior representatives from the Reserve Bank of India, the Securities and Exchange Board of India and other financial-sector regulators, focused on streamlining approvals, speeding up regulatory clearances, and identifying  frictions faced by foreign funds.

​The Ministries and Regulatory Agencies will undertake follow-up actions and have been entrusted with evaluating the proposals presented at the meeting. While no policy has been announced yet, the government is planning to take measures to revive investment sentiment.  

​On Tuesday, at an event organised by industry body Federation of Indian Chambers of Commerce and Industry (Ficci), the Commerce Minister Piyush Goyal had said, “We do need to see policy certainty and stable currency and confidence in investors about the entire investment ecosystem.” He also suggested the industries to diversify their supply chains so that there would be no/significant dependence on any single country, to keep it nominal. He further added, “The government is focusing on building a strong domestic manufacturing base. We need to assess our supply chain for vulnerabilities, especially when trade is being weaponised, and we have experienced the same.”