New Delhi: Contesting the US charge that Indian FDI rules are “opaque”, commerce and industry minister Anand Sharma on Tuesday said the country follows a simplified direct investment regime.
“We came out with a FDI policy in 1996. There have been many changes since then and all the changes have been incremental and progressive. This year, we have taken many steps,” Sharma said at a Ficci function in New Delhi.
He said the FDI proposals in most sectors are cleared through the automatic approval route. In 2009-10, the country received FDI worth about $26 billion.
“Eight-seven per cent of the FDI which comes into India comes through this route,” Sharma said.
The commerce minister’s remarks come shortly after US commerce secretary Gary Locke reiterated the US complaint that India’s FDI rules are “complicated and opaque”.
“... More complicated and opaque rules of FDI too often discourage US investors from even entering the Indian market,” Locke said at the meet.
US President Barack Obama had also said in Mumbai that India should reduce barriers to trade and foreign investment.
Locke, who accompanied Obama to New Delhi, further said American business leaders complain that India’s system of tariffs and import charges are overly complex and “not developed with enough transparency”.
In addition, American companies face several non-tariff barriers, he said.
Seeking a level playing field for US companies, he said: “In essence, these barriers may provide some economic comfort in the short term, (but) it will limit the long-term potential for the Indian economy...,” Locke said.
Later, replying to media queries on FDI in multi-brand retail, Sharma said the issue was still under discussion.
Global retail giants like US-based Walmart and France’s Carrefour have shown interest in the country’s lucrative multi-brand retail sector, which employs 33 million people.