FDI reforms to revitalise India-UK partnership: CII

New Delhi: The reforms in foreign direct investment (FDI) are likely to set the tone for a revitalised investment partnership between India and the UK, industry chamber CII said Thursday.

The liberalisation of FDI rules announced by the government on Tuesday came just two days before Prime Minister Narendra Modi's first visit to the UK.

"As Prime Minister Narendra Modi embarks on a state visit to the UK, the FDI reforms announced by the Government this week are likely to set the tone for a revitalised investment partnership," CII said in a statement.

Seeking to strengthen Indo-UK economic ties, Modi today reached London on his three-day visit aimed at boosting Indo-UK economic ties. Modi is scheduled to hold talks with top British leadership including his counterpart David Cameron.

Key changes to the FDI regime include raising the limit for FDI approvals from the Foreign Investment Promotion Board (FIPB) to Rs 5,000 crore from Rs 3,000 crore, increasing foreign-investor limits in several sectors including private banks, defence and non-news entertainment media as well as allowing property developers to sell completed projects to foreign investors without lock-in periods.

"The recent FDI announcements covering 16 sectors include many areas of interest to the UK industry. The UK can build up its investment pipeline in the areas of defence manufacturing, infrastructure and real estate, financial services and conventional and renewable energy industry, among others," CII added.

It said the business community is also keenly looking forward to a substantial boost in economic relations and commercial cooperation announcements from the visit.

According to a CII analysis, cumulative equity investment from the UK to India between January 2003 and August 2015 amounted to USD 54.35 billion.

The annual equity investment from the UK for 2015 has already touched a six-year high at over USD 4 billion. At its peak in 2008, annual equity investment had crossed USD 10 billion.

Top sectors attracting investments from the UK include oil and natural gas, ports, roads and highways, chemicals, electronic equipment and telecommunications.

It recommended that the two sides step up engagement of their small and medium enterprises to enhance investment and employment.

Indian companies too have invested strongly in the UK, with a total of USD 11.3 billion of investments between January 2003 and August 2015.