The department of industrial policy and promotion (DIPP), the nodal foreign investment policy body, has pushed for treating people of Indian origin (PIO) on par with non-resident Indians (NRIs) in the investor class. The recommendation comes with certain riders for investing in sectors such as aviation and real estate. The department has written to civil aviation and urban development ministries seeking their suggestions on the issue prior to a meeting by Prime Minister?s principal secretary TKA Nair on the proposal.
?They (DIPP) have proposed to relax the guidelines by incorporating the security concerns of home ministry,? a government official said adding that the issue would be considered at PMO level by the end of this month. The proposal if cleared will help the country get more external investment in the face of falling foreign direct investment (FDI) inflow in the fist six months of the current fiscal.
A letter from DIPP said the group of ministers (GoM) set up in 2006 has never met on the issue.
When asked, a senior DIPP official told FE that the move to ease FDI guidelines for PIOs would enable more inflows into the country. ?A lot of PIO investments are being disallowed due to this policy. It?s time we increased participation from our rich diaspora for growth in such sectors like aviation and increase FDI inflow into the country,? the official said. Snapping a declining trend in FDI inflows for three successive months, India received foreign direct investment worth $2.11 billion in September, an increase of about 40% over that in the same month last year, an industry ministry official said. The FDI inflows in September 2009 were $1.51 billion. FDI inflows so far this year is worth $38 billion.
The sectors which attracted foreign investment included services, telecommunication, construction activities and computer software and hardware. The maximum investment came from Mauritius, the US, the UK, Singapore, the Netherlands and Japan.