Decision Not To Affect Foreign Investment

The industry ministry has described the Tatas decision to withdraw their proposal for setting up the airline project as `a little embarassing' but said the decision would not have any impact on foreign direct investments in the country.

According to ministry officials, such isolated incidents of one company withdrawing its application for a specific project will not have any influence on overseas investors as foreign investors who plan to set up projects in India do it on the basis of feasibility studies on the projects and their investment decisions would not get influenced by one or the other FDI proposal runs into problem with the government. Industry minister Sikander Bakht said `I do not understand why there is so much opposition to foreign investment in domestic airline projects. So far, nobdoy has given me any valid reason for this'. He, however, refused to comment on the Tatas decision to withdraw the proposal. The industry ministry officials, however, admitted that delay in the decision making on the Tata airline proposal `shows the lack of clarity aspect in foreign direct investment policies in certain sectors, which make it open for various interpretations'.

Except in two sectors _ civil aviation and information and broadcasting where the foreign investment policy guidlines need more clarity, the foreign direct investment guidelines in all other sectors are quite clear and transparent, the officials said.Regretting the decision on the part of an industrial house of repute such as Tatas was forced to withdraw its proposal, the Foreign Investment Promotion Board officials pointed out that the Board could not be blamed for the incident as it never tried to play `hide and seek' with the Tatas. Since the proposal related to a very critical asea, the Foreign Investment Promotion Boardcould not have taken a decision without the administrative ministry's views on it, the officials pointed out. The officials, however, wondered wheather it was an emotional reaction or a business decision on the part of the Tatas to withdraw their proposal.