The government unveiled a comprehensive policy document that consolidates all policies on foreign direct investment, including as many as 178 Press Notes issued from time to time, in a bid to simplify procedures.
Commerce & industry minister Anand Sharma unveiled the document at a press conference here and said it will be updated every six months, with the help of the Federation of Indian Chambers of Commerce & Industry (Ficci).
?The department of industrial policy & promotion (DIPP) will ensure the changes are incorporated every six months,? Sharma said, adding the industry lobby will also help and assist foreign investors who intend to invest in India.
Finance minister Pranab Mukherjee had announced about the document during his Budget speech on February 26, saying all prior rules, regulations and guidelines on foreign investment would be consolidated so that there is complete transparency on the matter.
?This would enhance clarity and predictability of our foreign direct investment policy to foreign investors,? the finance minister had said.
Thus far, foreign direct investment into India was administered primarily through a series of press notes, rules and guidelines issued over the years and some of its clauses had even led to disputes because of inconsistencies and vagueness.
These Press Notes not only fix investment caps on sectors like telecommunication or media, but also specify how foreign equity inflows will be treated.
Often foreign investment guidelines prescribed by the new Press Notes modify the old ones released in an earlier year. But since the Press Notes are spread over various years, many a times investors get confused.
DIPP is aware of the problems associated with not having a single platform on FDI norms.
?Because of the large number of Press Notes spread across many years, only specialised experts understand the norms associated with investments,? Sharma said.
This means that the Press Notes released till now will no longer exist under the new regime and instead, foreign investors will have to refer to the FDI rules.
After compiling the operational Press notes, the DIPP will put up the draft FDI rules for public comments. Moreover, the language and the wording in the new rule book will be simpler for better comprehension of investors.