JOIN USIn a bid to spur investments, Commerce and Industry Minister Anand Sharma today "strongly favoured" raising the FDI cap in telecom as well as defence sector and said he will meet global investors to address their concerns, particularly in multi-brand retail.
Before leaving for 10-day visit from tommorow to Helsinki, St Petersburg, Belfast and London, Sharma said he will address all the concerns of foreign retail sector investors and ensure all help in setting up stores.
Sharma said his ministry would move the Cabinet for further liberalisation in other sectors as well which hold potential for FDI inflows.
"I am strongly in favour of raising the cap in telecom sector. I have discussed this with the Telecom and Finance ministers and once we have the proposal, we will move the Cabinet for raising the cap to 100 per cent, and also for FDI in defence because we want defence manufacturing to be here," he told reporters.
He said his ministry wants global majors in defence sector to partner both with the PSUs and the private sector to manufacture weapon systems in India.
"Defence technologies have multiple applications including industrial applications. We want the global majors to partner with the Indian entities...so that the big outgo of foreign exchange could also be brought down and domestic manufacturing improves and jobs are created," he added.
On hiking FDI cap in defence sector, he said that he has written to the Defence Minister and would meet him on the matter.
"He (the Defence Minister) has written back to me suggesting that we will discuss this matter in a meeting," Sharma said.
When asked about the Defence Minister's response on the matter, Sharma said: "I will say that the letter does not convey which is anything negative but defence is a complex and sensitive matter and will sit together and take a view".
Sharma said he will hold deliberations with Prime Minister Manmohan Singh on all these issues.
He said he will chair a Retail Round Table involving CEOs of Indian companies and foreign investors on June 27 here to seek views on implementation issues and to address their concerns, if any.
Sharma will also address global investors in different cities during his 10-day tour. He said that after the consultations, the government may come up with clarifications and simplification of guidelines wherever required.
"If there are any other issues they (global investors) have in mind, the government is receptive to that and any if further clarity in the guidelines (are required, the ministry will clarify that) because the objective of the policy is to attract FDI," he added.
Sharma said the moment the ministry receives any FDI proposal in the multi-brand retail sector, "it will be fast tracked and will do hand holding wherever required as we have done in the case of IKEA".
The DIPP has already once released clarification.
FDI of up to 26 per cent is permitted in the defence sector. The cap in telecom sector is currently fixed at 74 per cent.
When asked whether he is happy with the clarifications issued by the DIPP, Sharma said: "There is nothing which can be called perfect but at the same time we are accommodative and receptive... There are inbuilt flexibilities. Policy formation is a continuous process".
About his meetings with global investors, he said that he would explain the policy parameters to them and also hear from them about their expectations.
"...and if there are any issues where more clarity is required in the guidelines, the government is receptive to that and we will address it at the earliest," he said.
Sharma clarified that investors in multi-brand retail have to invest in creating new infrastructure at the back end and acquiring existing infrastructure would not be counted towards fulfilment of condition of mandatorily investing 50 per cent in the back-end infrastructure.
"What is the philosophy of the policy is to create back end infrastructure and that is additional. Already created is not new creation... Therefore, what is existing cannot be qualified as an additionality. It has to be an additionality otherwise the philosophy or the spirit of the policy per se gets negated. Infrastructure needs to be created. India needs that," he said.
Sharma also clarified that the first tranche of the mandatory 50 per cent investment have to be done in the creation of fresh back end infrastructure.
He said the ministry would continue the dialogue with the global investors to address their concerns.
"I will be addressing two investors summit in London and Belfast. In St Petersburg Economic Summit, global investors will be there and there is a dedicated session on India and thereafter in July, there is an investors meeting in Paris," he added.
The minister said that he would continue with his effort of conveying that India is an attractive investment destination and the government is welcoming and supportive of foreign investments.
When asked whether the DIPP has received any proposal in multi brand retail store he said: "Some of them already have identified there domestic partners. Twelve states have notified the policy, which states they want to invest in? These are business decisions to be made".
On the concerns being raised by the DIPP in FDI in existing pharma companies, Sharma said: "We have some verticals in the pharma sector which are critical to the health security of the country and producing drugs which are meant for life threatening diseases.
"We would like to ensure that there is further enhancement in efficacy of medicines, new R&D and also additional capacity to be created to protect the situation where the existing production and the availability is not in any way diluting or threatened."