The Government should actively think of increasing the ceiling on foreign direct investment in sectors such as retail and insurance to promote more FDI inflow, which is witnessing a reversing trend for the past few quarters, said FICCI President, Mr Rajan Bharti Mittal.
“FDI is already short. We expect the shortfall to be around 35-40 per cent for the current fiscal,” Mr Mittal told reporters accompanying a FICCI CEO delegation to Italy. “The Government should allow more FDI in sectors such as retail, defence and insurance. Opening up of FDI in multi-brand retail would attract investors such as Walmart and Tesco,” Mr Mittal added.
However, at the recent World Economic Forum, Commerce Minister, Mr Anand Sharma, had advised the retail giants to wait and asked them to focus on developing the backend operations. Based on his interactions with the Italian industry over the last two days, Mr Mittal said Italian companies, especially in sectors such as fashion, retail and design, are keen to invest in India and allowing 100 per cent FDI in single brand would help attract them. “The Government should allow 100 per cent FDI with pre-conditions that they should invest in Indian manufacturing,” Mr Mittal said. Further, Mr Mittal said the CEO delegation visit to Italy would rekindle the trade relations between the two countries.
“Trade has rather been slow at around $7 billion. But with direct connectivity, we expect a pickup in sectors such as tourism, where we see great potential,” Mr Mittal said. India and Italy have identified 10 areas including infrastructure and manufacturing to set up joint business councils to promote bilateral trade and investments. “With Italy agreeing to try and simplify the visa regime, the trade ties will get a boost,” Mr Mittal said.