The Centre will have a more liberal Foreign Direct Investment (FDI) policy in place soon as a review of the country’s FDI policy will be finalised in the next few months.
“The results of the review will be in the direction of liberalisation, as was the case with similar policy reviews in the past,” Department of Industrial Policy and Promotion Secretary Ajay Dua said here today.
Speaking on the ‘Investment Scenario in India’ at the Plenary Session of a CII-sponsored seminar here, Mr Dua outlined the growing attraction of India as an investment destination and identified six sectors that have tremendous potential.

Basis for optimism
These are automobiles and auto ancillaries, IT and IT-enabled services, pharmaceuticals, biotechnology, food processing and telecommunications.
Mr Dua said FDI has started coming into the telecom sector in a big way now. In all these sectors, the basis for optimism about future growth stemmed from India’s cost competitiveness and supply side strengths, including a large intellectual capital base and the expanding domestic market.
Mr Dua said, India had deliberately followed a process of calibrated liberalisation of its FDI regime. Before 1991 FDI was allowed in selective sectors that up to 40 per cent. This went up to 51 per cent under the automatic route for 35 priority sectors in 1991. In 1997 it was decided to allow up to 74 per cent in 111 sectors under the automatic route and 100 per cent in some sectors, he said.
In 2000, up to 100 per cent FDI was allowed under the automatic route in all sectors except a negative list. After 2000 more sectors have been opened up, equity caps raised and conditions relaxed, he said.
There were no restrictions on FDI in the manufacturing sector where up to 100 per cent FDI had been allowed, Mr Dua added.

$30 b FDI target set
Meanwhile, Union Commerce & Industry Minister Kamal Nath said the Centre sought to double the FDI inflow to US$30 billion this fiscal in order to maintain a growth rate of 9 per cent per annum over the next five years.
“While FDI equity flows were US$5.5 billion in 2005-06, it increased almost three times to US$15.7 billion in 2006-07. We have set a target of US$30 billion in 2007-08,” Mr Kamal Nath said at the 3rd India-Gulf Corporation Corporation (GCC) Industrial Forum said here.
Mr Kamal Nath said resources for these investments are expected to come from both domestic and foreign sources.
The economy grew by 9.2 per cent in the last fiscal, he pointed out.

OWNERS NEED NOT SELL
Govt revisting SEZs land buy policy
Mumbai, Reuters: The government is reviewing its policy on acquiring land for special economic zones (SEZs) and it would no longer be compulsory for owners to sell, Commerce Minister Kamal Nath said on Tuesday.
“The whole land acquisition policy is being re-looked at, along with the rehabilitation policy,” Mr Kamal Nath told reporters. “The government has one clear thing on SEZs. SEZs are here to stay. The question is land acquisition. There would be no compulsory land acquisition,” he said.
The government has faced protests from farmers and land owners over its plans to acquire land to develop hundreds of SEZs — large, tax-free industrial enclaves — around the country to boost exports and economic growth. “SEZs are very important engines of growth. Land acquisition is not confined to SEZs but also for infrastructure development,” Mr Kamal Nath said.