New Delhi: The Union government has released a draft document aimed at simplifying overseas investments in India, bringing together all the rules regarding foreign direct investments (FDI) issued since 1991.
The document, called “FDI Regulatory Framework”, has been put up for comments from investors and other stakeholders till 31 January. The final policy framework will be released by 1 April and then reviewed and renewed every six months, commerce minister Anand Sharma said.
Since 1991, the Department of Industrial Policy and Promotion (Dipp), which overseas investments into the country, has issued 177 press notes on rules and guidelines for fund inflows.
Policy consolidation: Commerce minister Anand Sharma. Kamal Kishore / PTI
“The new document has not changed or amended the FDI policy,” Sharma said. “It only subsumes all the FDI press notes issues so far by DIPP.”
The new FDI document resembles the master circular released every year on 1 July by the Reserve Bank of India, which includes all circulars and clarifications issued over a year, said Akash Gupt, executive director at audit firm PricewaterhouseCoopers.
“Though the new FDI regulatory framework looks like a compilation of FDI press notes, it also seeks to align and harmonize the portfolio investment with FDI by bringing in the policy framework of FIIs (foreign institutional investors) into it, which is guided by Sebi (Securities and Exchange Board of India) guidelines,” He said. Gupt added the new policy framework clarifies what by now has become a practice in the retail sector—that while FDI is not allowed in retail, FII is permitted.
“This document keeps retail out of the prohibited sector list of foreign investment while retaining it in the prohibited sector list of FDI,” Gupt said.
India attracted $19.38 billion (Rs90,698.4 crore) of FDI between April and November. Inflows in November stood at $1.74 billion, a 60% jump over last November, Sharma said.