Head of Tax department in corporate law firm Amarchand & Mangaldas, Krishan Malhotra said.
The DIPP has moved a proposal to allow FDI in the cash-starved railways sector, particularly for development of rail lines between project sites and existing network. At present, no FDI is allowed in the railways sector.
Further while on one hand, the DIPP relaxed the foreign investment policy, on the other it has also proposed to tighten the norms in the sectors like pharmaceuticals and royalty payments.
The department had proposed major restrictions in the pharmaceuticals sector due to continuous acquisition of major domestic pharma firms by multi-national companies. It has said that the current development in the sector would jeopardise the availability of affordable medicines in India.
However, the Union Cabinet has rejected the DIPP's concerns.
Although the industry complained about the investment climate in the country, some reports have ranked India as one of the most attractive destinations for FDI.
The global survey of leading consultancy firm E&Y has rated India as the most attractive investment destination followed by Brazil and China at second and third positions, respectively.
According to an UNCTAD' survey, India has retained its position as the world's third most attractive destination for investment by transnational corporations (TNCs) during 2013-15.
New Ficci President Sidharth Birla said: "We do not have a business-friendly environment. We have so many regulations".
He has said that there was no problem with the policy, but there had been 'paralysis after policy', resulting in poor implementation of the policies.
In 2012 too, the global economic crisis forced the government to show animal spirit in liberalising FDI policy.
Last year. it had relaxed rules in sectors including multi-brand retail, single-brand retail, commodity exchanges, power exchanges, broadcasting, non-banking financial institutions (NBFCs) and asset reconstruction companies.