An inconsequential move for the sector

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: and a bulk of the sector, FDI has always been open.

If we turn to reserved categories, for equity participation in excess of 24% or in cases where a non-SSI unit wants to manufacture a reserved item, an industrial licence is required and a minimum export obligation of half the production.

What is rather surprising is the way some industry bodies raised this issue and included it in their reforms wish list, as if it was of critical importance. Also, the way the government touted it as an initiative to help technology upgrades.

What pro-reservation lobbies might note, however, is that the de-reservation process is effectively complete now with removal of QRs as well as allowing a higher investment limit by large companies. The increase in the limit, therefore, is at best a political statement and at worst inconsequential. The current debate, nevertheless, highlights the growing disconnect between what policymakers perceive SMEs need and what is actually happening on the ground.