Government liberalises FDI policy to boost inflows

Relaxing the rules for foreign direct investment (FDI) in the country, the government today decided to permit the issuance of equity to overseas firms against imported capital goods and machinery.
Furthermore, the norms for overseas investment in production and developments of seeds have been liberalised.

"After stakeholder consultations, the government has now decided to permit issue of equity, under the government route, in... import of capital goods/ machinery/ equipment (including second-hand machinery)," an official statement said.

This measure, which liberalises the conditions for conversion of non-cash items into equity, is expected to significantly boost the prospects for foreign companies doing business in India, it said.

In the agriculture sector, it said that FDI will now be permitted in the development and production of seeds and planting material without the stipulation of having to do so under 'controlled conditions'.