FDI will restore confidence-India News and Travel Times Provides India-centric and other News and Features

The liberalization of the FDI policy through increase in equity caps in civil aviation, power trading exchanges, broadcasting and opening up of multi brand retail for FDI, has, according to Adi Godrej, president, CII, "restarted the reform process." CII expressed satisfaction that its long standing recommendations to the Government to further open up some sectors to more FDI participation and opening up of multi brand retail have been considered. "Allowing Foreign Airlines to invest in civil aviation will bring in much needed capital into the Airlines industry thereby enabling healthy re-capitalization of airline companies, promoting vital connectivity and bringing benefits to all stakeholders including banks," Godrej said in the press release. "Increasing FDI caps in broadcasting industry to bring it at par with Telecom sector will also facilitate the process of convergence in communication and entertainment technologies and attract more players in the cable networks sector", he said. "The move to open up multi brand retail is a major step in the right direction and this will not only end a long standing uncertainty in policy making but also boost investors' confidence besides promoting supply chains in the agriculture sector," he added. The move to enhance FDI caps will help increase capital flows, which in turn should improve the current account deficit situation, according to CII. Alluding to the global perceptions, the press release said that CII is confident that the perception on India will now be corrected to some extent and hope that the sovereign ratings of India will improve. Welcoming further opening up of the broadcasting sector, the release said that broadcasting was one area of services sector that had significant interest from foreign investors to play a major role in expanding the networks through cable, DTH and other platforms and to bring in latest technologies that will help reach out to the last mile consumers. This will also help attract investments into this sector and help realize the Government's target of digitization of broadcasting by 2014 in the entire country. Lauding the government's decision to allow FDI in power exchanges, the CII release said that this move would encourage overseas investment in the fledgling power exchange business, which currently has two players. The policy will also provide clarity to foreign investors and help existing bourses get funds to scale up their operations. At present, FDI in power exchanges is not explicitly banned but the rules do not specifically provide for foreign investment on the lines of commodity exchanges.

Opening up retail, civil aviation, broadcasting and power trading would help restore confidence: CII