Tuesday, 9 July 2013

PM backs opening up FDI to boost rupee

In a bid to send a strong message to global investors, Prime Minister Manmohan Singh has backed the finance ministry and industry department's plan to raiseforeign direct investment (FDI) ceiling in telecom to 100%, besides allowing overseas flows into several sectors without prior government approval.

The list of sectors where companies will be allowed to invest through the so-called automatic route includes oil and gas refining, courier and commodity and power exchanges, sources familiar with the discussions said.

The plan to go ahead with a higher cap for telecom is seen as crucial with PMO having to deal with security concerns in the sector raised by the home ministry along with defence and space. The move on telecom can set the tone for more liberal limit in defence production. Although defence minister A K Antony has opposed higher foreign investment in defence, citing vulnerabilities, he has left the door open for allowing over 26% FDI backing in case-to-case clearances by the cabinet committee on security (CCS).

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