Government on Monday relaxed Foreign Direct Investment (FDI) norms in a host of sectors including civil aviation, single-brand retail, defence and pharma by permitting more investments under automatic route. The decision to further liberalise FDI regime with the objective of “providing major impetus to employment and job creation in India” was taken at a meeting chaired by Prime Minister Narendra Modi on Monday. This is the second major reform in the FDI space. The Centre in last November had significantly relaxed the foreign investment regime. Under the new regime, 49 per cent would be via automatic route and beyond that limit, government nod would be required. Allowing 100 per cent FDI in defence sector means India’s defence sector is thrown mostly into the hands of NATO- American defence manufacturers. Such a change comes after Prime Minister’s US visit when the government brought in “sweeping” changes in the FDI policy, it posed a “big threat” to national security and India’s independent foreign policy. Moreover, it will have an adverse impact on the ongoing indigenous defence research activities in the country. Contending that the Modi government had made India a “junior partner” of the US, the Communist Party has said FDI reforms in defence sector will make the country dependent on American/Israeli “clique”. “FDI in defence sector will push us to dependence on US- Israeli clique and have adverse impact on our security as well as sovereignty”. But has expressed caution over the government’s claims that the move will help bring in investment in the country and create job opportunities, but in reality the measures will carry “adverse impact”. Under the garb of ‘Make in India’, the FDI will be brought to set up ‘assembling units’ and will destroy all concerned small and medium industrial units in the country and throw hundreds of thousands out of job.
