Piyush Goyal: All about PM Modi's 'Man of the Moment' who presented Budget 2019

Why is the Indian government reforming FDI norms?: Piyush Goyal

Foreign Direct Investment (FDI) is one of the most important sources of growth in any developing economy like India. FDI norms are reformed from time to time so as to:

● Liberalise and simplify FDI policy

● Attract larger volumes of foreign investment inflows

● Drive economic growth and development

● Create large scale employment opportunities

● Make the country a preferred investment destination

Reforming FDI policy is a continuous process which is done after considerable stakeholder consultations. Recently, in a cabinet meeting chaired by Prime Minister Narendra Modi several changes have been made in the FDI Policy. These include provisions relating to various sectors including single-brand retail, contract manufacturing and coal mining etc. These changes in the FDI policy will help create job opportunities while boosting the country towards becoming a $5 Trillion economy.

Single Brand Retail Trading (SBRT): Changes are made with a view to providing more flexibility and ease of operations to entities. All procurements made from India shall be counted towards local sourcing, whether goods are sold in India or exported. Similarly, online retail trading is now permitted upto two years prior to opening brick & mortar store

Contract Manufacturing: 100% FDI under automatic route in contract manufacturing which will benefit manufacturing industry and create employment, while attracting foreign entities to invest in this sector and bring in global best practices

Coal Mining: 100% FDI under automatic route for coal mining activities including associated processing infrastructure to help in creating employment, affordable power, and development

With these reforms in the FDI policy regime, India’s FDI inflows will continue to surge and aid in boosting India’s economic growth.

(This post originally appeared on Quora)

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