With an aim to provide better business environment by removing obstacles, the government is likely to soon relax foreign direct investment (FDI) policy in select sectors, including single brand retail. This move is part of the Union Budget for 2017-18 announced by Finance Minister Arun Jaitley on February 1, 2017.
Union Minister Harsimrat Kaur Badal has stated that the government will consider the proposal made by foreign retailers for allowing non-food items like homecare products under the policy. The government is also considering a proposal to increase FDI limit in print media from 26 percent to 49 percent. Besides, in order to attract more global players in single brand retail sector, a proposal to allow 100 per cent FDI through the automatic route in the sector is also under consideration.
FDI in India has increased by 22 percent to $35.85 billion during April-December 2016. Earlier, the government had relaxed FDI norms in over a dozen sectors, including defence, civil aviation, construction and development, private security agencies, real estate and news broadcasting. Foreign investments are considered essential for India, which needs around $1 trillion to overhaul its infrastructure such as ports, airports and highways to boost growth. Foreign investments will help improve the country's balance of payments situation and strengthen the value of the rupee against global currencies, especially the US dollar.