SIX-POINT STRATEGY ON FDI
Date : 17 Oct 2001
Location : New Delhi
The government is pursuing a six-point strategy to facilitate implementation of Foreign Direct Investment (FDI) projects and to achieve a substantial increase in actual FDI inflows into the country. This was indicated by Shri Murasoli Maran, Union Minister of Commerce and Industry, at the Economic Editors’ Conference here this morning. The six-points of the strategy outlined by Shri Maran are as follows:
Secretariat for Industrial Assistance (SIA), which functions as the Secretariat for Foreign Investment Implementation Authority (FIIA) will contact all foreign investors who have obtained FIPB approvals to ascertain the progress of the implementation and the need, if any, of support in facilitating such implementation.
This contact would be initially at the operational levels and would be upgraded even to the Board levels, if so required, so that the investors at the highest corporate level become aware that Government of India is fully committed to ensuring that the FDI inflows into the country are smooth and implementation of projects is quick.
In the event of problems or difficulties coming to notice, the SIA will take up the matter with the appropriate Ministry/Agency or State government and, where required, bring it before the FIIA or its Fast Track committee.
FIIA will continue with greater vigour and frequency in its interaction with Ministries of the central government and state governments.
A decision has recently been taken to involve the Indian Embassies abroad in monitoring the FDI cases emanating from their regions on behalf of FIIA. Follow up action on reports from Embassies would be taken by FIIA. The Embassies have also been authorised to accept FDI applications, in addition to the existing practice where applications can be sent directly to SIA either through conventional modes or even online through computers.
The SIA would adopt a sector-wise approach in pursuing FDI cases for more effective coordination with Administrative Ministries. In addition to this, the current mechanism of reviewing mega projects and holding meetings on a region-wise basis and meetings with investors of specific countries e.g., Japan, Germany etc. would also continue with greater frequency.
`The Minister also clarified that contrary to reports giving the impression of a decline in FDI, inflows of FDI into the India had grown consistently and said that FDI inflows during the current year had been encouraging despite the global slow down. In fact, the total FDI inflows during January-August 2001 were US $ 3.19 billion which is 33% higher than the inflows during the corresponding period of the last year. This is also the highest FDI inflow in the last 5 years, with a realisation rate of 68% which is very heartening, the Minister said. Further, there is no visible impact after September 11, which gives hope that the upward trend in FDI inflows would continue. Citing an UNCTAD report, the Minister emphasised that opening up alone would not do and a targetted approach was needed to accelerate FDI. "Speed in approval, speed in implementation is vital", Shri Maran said, while emphasising that the 6-point strategy was based on the premise that follow up action after approvals held the key to attracting more FDI.