The government has decided to open up the food retail business to overseas investors and also to grant residence status to foreign players, which will go beyond five-year visas. “This will be like permits you get in Dubai. We are trying to address this concern that was expressed by many people,” said industrial policy and promotion secretary Amitabh Kant. The details would be thrashed out in consultation with the home ministry and MEA, but investors with investment beyond a specified limit would get residence permits.
In the Budget, the government eased FDI rules for several sectors, including allowing overseas players to enter the food retail arena. The steps are seen to have gone beyond the policy on multi-brand retail pursued by the UPA, but sources in the Modi government defended it arguing that the move was meant to benefit farmers.
In addition, it permitted 49% foreign investment in insurance and pension sectors via the automatic route. There were also sops for stock exchanges, some of which are planning to list, such as BSE. The investment limit for overseas investors in Indian stock exchanges has been enhanced from 5% to 15%, bringing them on a par with domestic institutions.
