“Removal of the caps in such sectors would not be in the interest of the country,” said a Commerce & Industry Ministry note on Tata panel’s recommendations. Strategic and security issues were cited for retaining the current FDI limits in these sectors.

While Udyog Bhavan bosses feel that there was scope for further opening up of retail trade, the Centre may not open up lottery, gambling and atomic energy sectors for FDI.

In its assessment to the PMO, the Commerce and Industry Ministry feels that FDI in retail trade , supply chain and construction has the potential to attract more investment. And, hence, the retail may be further opened up for FDI.

Currently, FDI is allowed up to 51 per cent in retail trade of single branded products. Ratan Tata’s Investment Commission set up in Finance Ministry has favoured 49 per cent FDI in retail sector “without any conditional restrictions such as location, category, number of outlets or brands”.

In this context, the commission has also mooted comprehensive amendments to the APMC Act in all states that allows farmers to sell the farm products to licensed retailers and wholesalers outside the market yard.

While the Agriculture Ministry is reviewing amendments to the APMC Act, the Commerce Ministry has cited the serious concerns expressed by Parliament members and trade bodies on permitting direct purchase of food and agriculture products by retailers.

On insurance, it has been stated that the Finance Ministry is processing a proposal to hike the limit to 49 per cent from the current 26 per cent. Amendments to the Insurance Development and Regulation Act are being processed to enable this hike, Commerce & Industry Ministry note said. But, these amendments have not moved an inch owing to political opposition from within and Left parties.

With regards to telecom sector, the UPA Government has taken the position that enhancing FDI limit in the telecom sector to 74 per cent was not possible without addressing the security concerns.

Currently, 74 per cent FDI limit in telecom sector is allowed under approval route. Foreign investment up to 49 per cent is allowed under automatic route. The Investment Commission has mooted 74 per cent FDI in telecom “without additional conditionalities”.

Commerce and Industry Ministry has not supported the Investment Commission’s proposal to allow 49 per cent FDI in print media under the approval route.

While maintaining that Information & Broadcasting Ministry led by Priyarajan Das Munsi was empowered to take a decision on electronic and print media, Udyog Bhavan has maintained that no recommendation has been made in this regard.

No view seems to have been taken on increasing the FDI in private banks to 100 per cent from the current 74 per cent.

Source: by hindustan times