Prime Minister Narendra Modi will review the Foreign Direct Investment (FDI) policy tomorrow with an outlook of removing bottlenecks to overseas inflows, sources said.
At the meeting, the commerce and industry ministry will make a detailed presentation on proposed changes to streamline the FDI regime in the country.
Finance Minister Arun Jaitley, Commerce and Industry Minister Nirmala Sitharaman and Secretary, Department of Industrial Policy and Promotion (DIPP), Ramesh Abhishek will attend the meeting.
The meeting assumes significance as the government is considering relaxing FDI norms in several sectors, including retail and construction. Also, on the table is the proposal to ease rules in print media, construction, single brand and multi brand retail trading.
Plans are afoot to loosen the policy in the construction sector, under which an Indian company could be allowed to bring in FDI even for undeveloped plots in any project.
As per the current policy, 100 per cent FDI is allowed in the construction sector subject to various conditions. The government is weighing the option of permitting overseas retailers to open stores for selling ‘Made in India’ products only.
Although the current FDI policy allows overseas players to hold 51 per cent stake in an Indian retail company, the BJP in its election manifesto had opposed foreign investment in the retail space. Currently, FDI up to 49 per cent is permitted under the automatic route, but beyond that limit, government nod is required.
FDI also helps improve the country’s balance of payments situation and strengthen the rupee against other global currencies, especially the US dollar.