The government on Thursday said it would not scrap Press Note 1 of 2005 that protects the interests of domestic companies from its foreign joint venture partner by mandating that the foreign company would have to obtain their approval before making a fresh investment in the same sector in India.
The commerce and industry minister, Kamal Nath, said the government was not considering doing away with Press Note 1 (2005) as it enables local companies to get the technology and financial resources to expand operations. It also offers protection to domestic firms from their foreign company joint venture partner who wishes to jeopardise their (Indian company?s) interests after having gained a foothold and name in India through them.
?We do not want investment that jeopardises the interests of our companies. But Indian companies, if hurt due to severance of ties and subsequent separate investments made by the foreign company partner in the same sector, must prove that they have suffered a bona fide injury,? the minister said.
Earlier, there were reports that to free up flow of foreign direct investments (FDI) into the country, the government was mulling scrapping Press Note 1 (2005).
