labels: industry - general, economy - general
Government postpones FDI policy review by a monthnews
06 March 2007

Mumbai: Retail FDI would have to wait a bit longer as the country's political leadership is yet to decide on opening up the sector to foreign companies eyeing the country's buoyant markets in a host of sectors.

The government has decided to postpone changes in foreign direct investment (FDI) norms by about a month amidst growing opposition to entry of foreign retail groups into the country.

The annual review of the FDI policy is due this month but it has now been decided to postpone the exercise as Parliament is in session.

The review will come up when Parliament goes into recess from March 21 to April 18, official sources said.

While the government is likely to allow foreign investors pick stake in commodity exchanges and change norms and caps for aviation and petroleum, reports say it is unlikely to do so in the retail sector owing to political opposition.

It is likely that the government could liberalise FDI norms in asset reconstruction companies, where the limit currently stands at 49 per cent through Foreign Investment Promotion Board approval.

In the banking sector, the cap on voting rights is likely to be reviewed while in the petroleum sector, the condition of 26 per cent equity dilution in favour of Indian entities in five years could be a part of the changes.

In aviation, the government proposes to introduce a separate head of air traffic services that would constitute the services and set FDI rules and limits for different services accordingly.


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Government postpones FDI policy review by a month