To wean business away from China, eased FDI norms likely

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With an eye to attract more investment and boost domestic economic activity, the Centre is eyeing further easing of foreign direct investment rules, in addition to pushing reforms in mining, banking and capital market sectors, commerce and industry minister Piyush Goyal said.

The minister’s statement at India Global Week comes at a time when the government is working to wean away from China investors who are looking to diversify their production bases, with several firms keen to avoid concentration in China after the coronavirus pandemic. The focus has intensified after the tension with China on the Ladakh border as the government is keen to bolster domestic manufacturing.

Sources said the FDI reforms could be announced over the next few weeks. At the event, Goyal said the Centre is also looking at simplifying domestic approvals and bureaucratic processes to make it easier for industry to do business. 

“We have significant items on the table. We are looking at further reforms in the mining sector… at opening up FDI in certain sectors where there are some constraints. We’ll soon be coming out with a new industrial policy, a forest policy and several other initiatives to promote economic activities… We are looking at banking sector and capital market reform,” he said.

He further said a number of indicators are showing that economic activity has ramped up over the last 30-40 days. Power consumption is back to 90%, GST tax collection has improved, he added. “So I believe we will be able to recoup very quickly.”

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