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India eases foreign investor rules

November 10, 2015

Foreign companies looking to do business in India may soon find their chances of success greatly improved. In a bid to boost growth, India´s government has announced plans to ease overseas investment regulations.

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Hannover Messe Partnerland Indien
Image: Deutsche Messe AG / Lars Kaletta

India is notorious for its bureaucratic red tape and regulations which make it difficult for overseas companies to gain a foot hold in the country. The Indian government unveiled new plans Tuesday to ease those regulations for foreign direct investment (FDI) in fifteen sectors, including defense, civil aviation, mining, construction, retail and banking. It will also lift the caps on investing in other certain sectors including broadcasting and air transport, as well as coffee and olive tree plantations.

The Commerce Ministry said in a statement that the liberalization of its FDI program sought to "open up sectors for more foreign investments in the country and also to make it easy to invest in India."

Currently investment proposals from abroad must be approved at numerous governmental levels. The new process would see proposals "on an automatic route instead of a government route where time and energy of the investors is wasted," the Commerce Ministry added.

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The overhaul of the current legislation is an effort to revive the country´s faltering economy and comes after Indian Prime Minister Modi's Bharatiya Janata Party suffered a resounding defeat in Bihar state elections, in a battle fought largely over development in India´s poorest state. The reforms also appear to be a signal of intent ahead of Modi´s first visit to London as India's leader later this week, where the pursuit of British investment will be on the Prime Minister's agenda.

hch/uhe (AFP, dpa)