Push for foreign finance goes on [National, The (United Arab Emirates)]
(National, The (United Arab Emirates) Via Acquire Media NewsEdge) India plans to continue its efforts to ease its policy on foreign direct investment (FDI) over the coming weeks, as figures show a slump in inflows.
FDI inflows between April and October fell 15 per cent to US$12.6 billion compared with the same seven months a year earlier, according to government figures.
This is despite efforts by the government to attract more FDI. These include the easing in 2012 of rules on overseas investment in sectors such as aviation and retail, which resulted in Etihad Airways buying a 24 per cent stake in Jet Airways.
"The bold decisions of the [government] for liberalising foreign direct investment policy in key sectors such as civil aviation, retail and telecoms have resonated with the global community, and we have seen results in the past few months," said Anand Sharma, India's ministry of commerce and industry.
"The government will continue its endeavour for liberalising the FDI policy further in the coming weeks to ensure that India retains its leadership position for attracting foreign investments."
The government has approved plans by the British supermarket chain Tesco to expand in India in partnership with Tata Group. It is the first multi-brand retailer to sign up to invest in the country under liberalised regulations to allow overseas chains to invest up to 51 per cent in an Indian company. Tesco plans a total investment of $110 million.
The American retail giant Wal-Mart in October revealed that it had put its expansion plans in the country on hold.
Vodafone, the British telecoms company, is awaiting final approvals to take complete ownership of its business in India in a $1.6bn deal.
FDI is much needed given that India's economic growth slowed to its lowest levels in a decade in the past financial year.
"Better coordination between the central and state governments on implementing already-announced policies (such as land reforms and FDI in multi-brand retail) and new policies will be important to reviving investment sentiment," according to Standard Chartered.
Manmohan Singh, India's prime minister, on Friday indicated that the country was striving to provide a favourable environment for foreign investors.
"India provides a hospitable environment for FDI," he said. "We will continue to do so. We will continue to improve upon our practices wherever needed."
* Rebecca Bundhun
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