CRI听力:India Announces Plans to Open up to Foreign Investment

The industry-specific reforms include allowing 49 percent FDI in the defence sector made through automatic route - without government approval. Foreign portfolio investors can also invest up to 74 percent in private banking.

In the construction development sector, minimum capitalisation norms and floor area restrictions have been removed.

The Indian government will also lift the caps on investing in certain sectors including broadcasting, and air transport and will increase the use of "automatic" routes for gaining investment approval in others.

Finance Minister Arun Jaitley said the reforms supported the government's "top priority" of making it easier for companies to do business in India.

"We still need a very large resource both for infrastructure, for new initiatives like 'Starup India', 'Skill India', 'Make in India'. And as I said foreign investment is certainly an important additionality of resource. Investors also prefer invest in destinations where growth is peaking up, returns seem likely and easy to do business."

Pointing out that both the World Bank and the World Economic Forum have looked at India favourably, the Finance Minister said that some outdated conditions which existed have been either done away with or have been eased by the Narendra Modi government.

"In some areas sectoral caps have been enhanced but more important than that some outdated conditionalities which existed along with the sectoral caps have been either done away with or eased. Many more areas have been put into the automatic routes."

The FDI reform came ahead of the Indian Prime Minister Narendra Modi's visit to Britain with investment topping his agenda. Analysts say the move is expected to help cut down on red tape for foreign investors, and boost the entire investment environment.
Indian economist Gurcharan Das:

"This announcement today is an important announcement, not only because of the sectoral caps that are involved, but because, as the press notes that accompany this announcement explain, that the fundamental thing the government is now driving at is to make the lives of investors easier. So much of what was before, that involved going to the government, has now been put on an automatic route. You just go to the bank and start doing the business. You don't need permissions, and you don't need the kind of licensing restriction."

FDI reform in India has also attracted international attention. The Credit rating agency Fitch described it as a significant structural macro-economic reform, saying it indicated that India's reform momentum remains intact.

For CRI, I'm Luo Wen.