India’s government on Tuesday announced plans for a sweeping liberalisation of its foreign direct investment (FDI) regime, as Prime Minister Narendra Modi seeks to counter accusations his reform drive is stalling.
The government said it would undertake a raft of reforms to open up 15 areas of the economy, including lifting the caps on FDI in the critical defence, banking and construction sectors.
It said the reforms were aimed at making it easier for overseas companies to do business in India, notorious for its red tape and labyrinthine regulations.
“This exercise… is intended on the one hand to further open up sectors for more foreign investments in the country and also to make it easy to invest in India,” the Commerce Ministry said in a statement.
A spokesman contacted by AFP said details of the new FDI limits for specific sectors were not immediately available, although he said further details would be announced later in the day.
The reforms come after Modi’s Bharatiya Janata Party suffered a drubbing in state elections in Bihar, in a battle fought largely over development in India’s poorest state.
They also appear to be a signal of intent ahead of the prime minister’s first visit to Britain as leader later this week, where he will be seeking investment from the former colonial power.
Modi stormed to power in 2014 promising sweeping reforms to revive the faltering economy.
Growth is now chugging along at seven percent, putting India among the fastest-growing of the G20 nations.
But complaints have been mounting about the Indian leader’s failure to nail down major reforms to boost investment and help create jobs for India’s tens of millions of young people.