FDI witnesses major liberalisation in 2013; more to follow

Besides, the Department of Industrial Policy and Promotion (DIPP) is also expected to soon float a discussion paper on permitting FDI in e-commerce in retail trading.
 
However, in terms of foreign inflows, India has attracted FDI worth $16.85 billion during the January-September 2013 period, which is a dip of about 10% over the same period last year.
 
India is projected to require around $1 trillion between 2012-13 and 2016-17, the 12th Five Year Plan period, to fund infrastructure growth covering sectors such as ports, airports and highways.
 
A decline in FDI would hurt the rupee, which had depreciated to a record low of 68.85 against the US dollar on August 28. It has strengthened since then to about 62 level.
 
According to experts, although the government has relaxed FDI norms in several sectors, the global players are waiting for the formation of the new government due around May-June next year.
 
"In 2014, the next government will have to speed up the liberalisation process in order to attract more investments," Head of Tax department in corporate law firm Amarchand & Mangaldas, Krishan Malhotra said.
 
The DIPP has moved a proposal to allow FDI in the cash-starved railways sector, particularly for development of rail lines between project sites and existing network. At present, no FDI is allowed in the railways sector.
 
Further while on one hand, the DIPP relaxed the foreign investment policy, on the other it has also proposed to tighten the norms in the sectors like pharmaceuticals and royalty payments.