The government on Thursday unveiled a draft policy regime for Foreign Direct Investment that not only includes 177 Press Notes released over the past two decades in to a single platform, but also guarantees a review every six months. As reported by FE earlier, the new regulatory framework for FDI is expected to be operationalised from March 31, 2010.
The new policy regime on overseas investments will be in the form of a single consolidated press note, which will not only specify the sectoral caps, but also the way foreign investments will be treated. The 66-page press note is divided in to five chapters that deals with various aspects of FDI and can be downloaded from http://www.dipp.nic.in. The final version will be released after industry consultations.
However, the policy objectives of the press notes that have been subsumed in the new one will not change. ?It is clarified that this is a consolidation/compilation and comprehensive listing of most matters on FDI and is not intended to make changes in the extant regulations. While attempt has been made to deal with the subject comprehensively, if some aspect(s) has been left out then that will continue to be dealt in the current way where it is listed,? the draft consolidated Press Note says.
?As far as FDI policy is concerned, it has been felt, through interaction with various investors, counterpart government organisations and other stakeholders, that there is a need for further simplification and consolidation of the FDI policy framework, so as to make it more comprehensible to all investors and stakeholders?, commerce minister Anand Sharma said while releasing the draft FDI rules for public comments.
The consolidated FDI policy seeks to provide clarity in the FDI regime and at the same time provide a predictable investment atmosphere. The move will also ease the regulatory platform of the government.
The unique feature of this new regime is the consolidated press note will be reviewed every six months. The DIPP will continue to release press notes to clarify or make changes in the policy. But the new press notes will be subsumed in to the consolidated press note every six months. This has be done to avoid multiple policy documents on overseas investment norms.
?Essentially, we want to do away with the multiple press note regime that leads to a lot of confusion amongst overseas investors. The objective is to prepare a single platform for FDI related norms,? said Gopal Krishna, joint secretary, department of Industrial Policy and Promotion.
The industry welcomed the move, but called for removal of bottlenecks seen while implementing FDI funded projects.
