Left Menu
Development News Edition

Govt may permit 100 pc FDI in contract manufacturing: Sources

PTI | New Delhi | Updated: 11-08-2019 12:56 IST | Created: 11-08-2019 12:55 IST
Govt may permit 100 pc FDI in contract manufacturing: Sources
Image Credit: Pixabay

The government is working on a proposal to allow 100 percent FDI in contract manufacturing with a view to attract overseas investments, sources said. According to the existing foreign investment policy, 100 percent foreign direct investment (FDI) is permitted in the manufacturing sector under the automatic route. A manufacturer is also allowed to sell products manufactured in India through wholesale and retail channels, including through e-commerce, without government's approval.

"The current policy does not talk about the contract manufacturing and it is not clearly defined in the policy. Big technology companies across the world are going for this, so there is a need for a clarification on the matter which government is considering positively," they said. The commerce and industry ministry is working on a proposal that would be finalized soon and sent for Union Cabinet's approval.

Commenting on the proposal, Rajat Wahi, Partner, Deloitte India, said the move if approved by the government will give a boost to the manufacturing sector. "It is a welcome proposal for technology-based companies like Apple," he said. Finance Minister Nirmala Sitharaman in her Budget speech in July had proposed relaxation in the FDI norms for certain sectors such as aviation, AVGC (animation, visual effects, gaming and comics), insurance, and single-brand retail with a view to attract more overseas investment. FDI in India dipped 1 percent to USD 44.36 billion in 2018-19.

Last year, the government had relaxed FDI rules for several sectors, including single-brand retail, non- banking financial companies and construction. Foreign investments are considered crucial for India, which needs billions of dollars for overhauling its infrastructure sector such as ports, airports, and highways to boost growth. FDI helps in improving the country's balance of payments situation and strengthen the rupee value against other global currencies, especially the US dollar.


TRENDING

OPINION / BLOG / INTERVIEW

Post-COVID-19 Nigeria needs a robust Health Management Information System to handle high disease burden

Nigeria is among a few countries that conceptualised a health management information system HMIS in the early 90s but implementation has been a challenge till date. Besides COVID-19, the country has a huge burden of communicable and non-com...

Morocco COVID-19 response: A fragile health system and the deteriorating situation

Learning from its European neighbors, Morocco imposed drastic measures from the initial stages of the COVID-19 outbreak to try to contain its spread. The strategy worked for a few months but the cases have surged after mid-June. In this sit...

COVID-19: Argentina’s health system inefficiencies exaggerate flaws of health information system

You can recover from a drop in the GDP, but you cant recover from death, was the straightforward mindset of Argentinas President Alberto Fernndez and defined the countrys response to COVID-19. The South American nation imposed a strict...

Videos

Latest News

100,000 march in Belarus capital on 50th day of protests

About 100,000 demonstrators marched in the Belarusian capital calling for the authoritarian presidents ouster, some wearing cardboard crowns to ridicule him, on Sunday as the protests that have rocked the country marked their 50th consecuti...

Tennis-It's nasty out there, but I like it, says Isner

Big-serving American John Isner said it was bit nasty out there after coming through his opening round at the French Open on Sunday but had few complaints about the conditions. The 35-year-old Texas resident does not usually play in chill w...

Priests’ body condemns moving court on Lord Krishna birthplace dispute

A body of priests has condemned the filing of a petition in a Mathura court for the removal of Shahi Idgah mosque near the birthplace of Lord Krishna in the holy city. The Akhil Bhartiya Tirth Purohit Mahasabha condemned the legal move two ...

Congress MP asks West Bengal CM to compile database of migrant labourers & send it to Centre

Congress MP Pradip Bhattacharya in a letter to West Bengal Chief Minister Mamata Banerjee claimed that a large number of migrant workers have not been registered in their native districts and hence deprived of the Prime Ministers benefit sc...

Give Feedback