FDI reforms to push India-US trade: USIBC
The Dollar Business Bureau
A business activity group said that the number of reforms announced by India for boosting Foreign Direct Investment (FDI) in several sectors will strengthen the bilateral trade between US and India.
Mukesh Aghi, President, US-India Business Council (USIBC) on Monday said, “The broadened scope of FDI regime in sectors such as defence, broadcasting services, civil aviation and pharmaceuticals will give a fillip to the bilateral trade potential of US and India.”
The USIBC said that to liberalise the FDI regime in civil aviation, defence, pharmaceutical sector and broadcasting services just after the Prime Minister’s visit to the US earlier this month has boosted the confidence of the investors.
Aghi said, “We appreciate the decision of the government for liberalisation of FDI to 74 percent in brownfield or new investments in pharmaceutical sector under automatic route, whereas also permitting investments more than 74 percent and up to 100 percent via government approval.”
The long awaited policy on National Civil Aviation is likely to enhance tourism, promote regional connectivity and boost the 2-3 tier cities economy.
Aghi emphasised on the fact that in 2015-16, India is the fastest growing aviation market with a growth rate of more than 21 percent in the domestic sector.
"The country continues to attract foreign investment in spite of an uncertain world economic outlook. There are some key improvements that have taken place since Modi became the Prime Minister, he said.
These reforms are greater openness to FDI, faster infrastructure investment, revised bankruptcy code and less red tape, he added.
He further stated that $45 billion investment in India is only a beginning for the US companies. With these freshly announced reforms, jobs, technology transfer and FDI’s are expected to increase considerably.
The Indian government on Monday has announced a FDI regime change allowing 100 percent FDI in the food processing and civil aviation sector as well as easing the norms in pharmaceuticals and defence sectors.