The Narendra Modi government has made it a point to listen to feedback, particularly on economic policy. While last week was about restoring the confidence of corporate India and portfolio investors, Wednesday was about easing foreign direct investment (FDI) norms across sectors, besides relaxing rules to make doing business in India easier still. This could not have come a day too soon, given the slowdown the country is grappling with.
The relaxation of local sourcing norms in single-brand retail and allowing of 100% FDI in contract manufacturing could help lure foreign companies amid the souring of Sino-US commercial relations. Apple, for example, may spot an opportunity here. Similarly, 100% FDI under the automatic route in merchant coal mining could attract global energy majors. India has vast reserves that remain relatively underexploited. For a government that has been accused of being in denial—or deaf to criticism—on the economy, these are welcome moves. The dithering is clearly over. The Centre is not just listening, it is displaying how responsive it can be on economic issues when the going gets tough.