FDI policy review to be over by July

New Delhi, May 29 | Updated: May 30 2007, 05:30am hrs
The foreign direct investment (FDI) policy review, currently under way, would be completed and announced by June-July 2007, Ajay Dua, secretary, department of industrial policy and promotion (DIPP), said on Tuesday.

Speaking at a seminar on "Gulf Cooperation Council-India Investment Opportunities" in Mumbai, Dua said the results of the FDI review would be in the direction of liberalisation, as was the case with similar policy reviews in the past.

Dua outlined the growing attraction of India as an investment destination and identified the following as the six sectors with potential - automobiles and auto ancillaries; information technology (IT) and IT - enabled services; pharmaceuticals; biotechnology; food processing; and telecommunications.

He mentioned in this context that FDI had started coming into the telecon sector in India in a big way now. In all these sectors, the basis for optimism about future growth stemmed from India's cost competitiveness, supplied side strengths including a large intellectual capital base and the expanding domestic market, he said.

He emphasised that India had deliberately followed a process of calibrated liberalisation of its FDI regime - from the pre-1991 policy when FDI was allowed selectively upto 40% and thereafter, in 1991 upto 51% under the automatic route for 35 priority sectors to the year 1997 when it was decided first to allow upto 74/51/50% in 111 sectors under the automatic route and 100% in some sectors. In 2000, upto 100% was allowed under the automatic route in all sectors except a negative list, while more sectors have been opened, equity caps raised and conditions relaxed in the post-2000 phase, he said, underlining that there were no restrictions on FDI in the manufacturing sector.