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Fdi Policy-Rationale and Relevance of Caps

In: Business and Management

Submitted By saradhi
Words 3772
Pages 16


Invitation of Views

1. As part of its inclusive approach to the formulation of various policies, this Department has been engaging in prior public consultations on important issues on which policy reform is contemplated. These structured discussions are triggered by the publication of Discussion Papers (DPs) outlining such issues. The Department has, so far, published eight discussion papers, of which five have a direct nexus with FDI policy. Of these five, policy action has been completed in respect of three DPs and is ongoing in respect of two DPs.

2. This is the ninth Discussion Paper in the consultation series. Views and suggestions are specifically invited on Section VIII of the paper entitled ‘Issues for Consideration’ and any related issues by 15th July, 2011. The objective is to examine whether some elements of FDI policy need to be reviewed. It is requested that facts, figures and empirical evidence may be furnished, in the context of the specific observations/suggestions made.

3. The views expressed in this discussion paper should not be construed as the views of the Government of India. The Department hopes to generate informed discussion on the subject, so as to enable the Government to take an appropriate policy decision at the appropriate time.


4. The evolution of FDI policy in India has broadly gone through four phases[1].

5. The first phase, between 1948 and 1969, was characterised by a cautious welcome to foreign investment, as outlined in the Industrial Policy Statement of 1948, which observed that the ‘participation of foreign capital and enterprise will be of value to the rapid industrialisation of the country.’ It, however, noted that ‘the conditions under which it may...

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