By Penelope Macrae, AFP
NEW DELHI — India aims to throw open its doors wider to overseas investors, a minister said Wednesday, as it seeks to spur a slumping economy before the general election. The government has already relaxed foreign direct investment (FDI) rules in such sectors as civil aviation, retail, telecommunications, defense and oil refineries to loosen shackles on the long-protected economy. “The government will continue its endeavor for liberalizing FDI policy further in the coming weeks … for attracting foreign investments,” Commerce Minister Anand Sharma said. India is struggling to increase its attractiveness to overseas business to buttress a weak rupee and to support growth with the election due by May. But political opposition has made economic liberalization a stop-start process. Five-percent annual growth — the slowest in a decade — a string of graft scandals, suffocating bureaucracy and project approval delays have soured the investor mood on Asia’s third-largest economy.
But in a vote of confidence in India’s long-term potential with its increasingly affluent consumers, FDI interest has shown signs of picking up lately.
Earlier this week the foreign investment regulator cleared plans by British retail giant Tesco and Vodafone, the world’s largest mobile phone operator, to invest over US$1.5 billion in India.
“The bold decisions of the government (to liberalize the economy) have resonated with the global community and we have seen results in the last few months,” Sharma said in a New Year’s Day message. Officials say the government is now looking at relaxing a ban on FDI in the cash-hungry dilapidated railways, one of the world’s largest networks, and improving lines to ports and industrial hubs that would boost productivity. Still, an investment turnaround could be some way off. Between April and October of this financial year, FDI slid 15 percent to US$12.6 billion from a year earlier, official data showed.