Industry and Legal Experts Advocate for FDI Policy Reforms

In a recent consultation led by the Department for Promotion of Industry and Internal Trade (DPIIT), industry leaders and law firms have proposed significant amendments to the Foreign Direct Investment (FDI) regulations. The primary focus is on increasing the FDI cap for R&D and security agencies, liberalizing rules for agriculture and plantations, and streamlining the process for Chinese investments to make India a more attractive destination for global investors.

Streamlining Chinese Investments and Sector-Specific Proposals

One of the critical discussions revolved around the scrutiny faced by Chinese investments, which are no longer on the automatic route. Participants emphasized the need for clear processes and timelines to handle these applications efficiently. Additionally, there was a proposal to align non-debt instrument (NDI) rules with the FDI policy, suggesting an increase in the FDI cap up to 74% in the private security agencies sector.

Boosting Agriculture and R&D Through Liberalized FDI

Industry representatives highlighted the potential benefits of easing FDI in agriculture and plantation sectors, arguing it could reduce imports from China and bolster India's manufacturing sector. Another forward-looking proposal was to permit 100% FDI in research & development across all sectors, aiming to position India as a global R&D hub.

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