New Delhi: Welcoming the landmark decision to open up the FDI regime during a meeting chaired by Prime Minister Narendra Modi, the Confederation of Indian Industry (CII) on Monday said the relaxation of local sourcing norms under single brand retail trading for advanced technology products would encourage global brands to build up their participation in the country."Liberalisation of the FDI regulations reflects the government`s commitment to reforms and openness, and reassures investors that ease of doing business remains high priority.
Taken together, the FDI rules announced today will attract big new investments across key sectors such as food processing, defence production, pharmaceuticals and civil aviation, among others, thereby adding to growth and employment," Director General of CII Chandrajit Banerjee said in a statement.It added that permitting food products manufactured in India to be offered through FDI in trading and e-commerce will help bring in more investments into the food retail chain and increase production in the organised sector."The conditionality in defence production FDI regarding `state of the art` technology has been done away with, allowing more defence producers to enter the large Indian defence procurement market. Relaxation of local sourcing norms under single brand retail trading for advanced technology products would encourage global brands to build up their participation in the country.
Altogether, nine areas have been liberalised by the government today," it further stated.The statement further read that these major decisions affirmed that India is open for business from the world and would contribute greatly to investments and development of the country.The present FDI regime permits 49 percent FDI participation in the equity of a company under automatic route.
The foreign investment beyond 49 percent has now been permitted through government approval route, in cases resulting in access to modern technology in the country or for other reasons to be recorded.Monday`s decision will allow 100 percent FDI under government approval route for trading, including through e-commerce, in respect of food products manufactured or produced in India.The decision was taken at a high-level meeting chaired by Prime Minister Narendra Modi.This is the second major reform after the last radical changes announced in November last year.