PM to discuss FDI related issues with Cabinet members tomorrow

Prime Minister Manmohan Singh will tomorrow discuss the proposal to hike foreign investment caps in sectors like telecom, retail and defence with his senior Cabinet colleagues.

The other issue which will figure in the meeting is the concerns raised by the Commerce and Industry Ministry on the increasing number of acquisitions of domestic pharmaceutical companies by foreign firms, an official told PTI.

The Department of Industrial Policy and Promotion (DIPP) has raised concerns over a spate of acquisitions of domestic pharma firms by multinationals. It has sought the intervention of the Prime Minister's Office (PMO) on this matter.

'All the FDI related matters are expected to be discussed in the meeting,' the official said.

Besides, Commerce and Industry Minister Anand Sharma and Finance Minister P Chidambaram are expected to attend the meeting.

Seeking to promote India as an investment destination, the Finance Ministry last month proposed sweeping changes in the FDI regime, favouring higher sectoral caps in almost all sectors including defence, multi-brand retail and telecom.

Virtually doing away with the 26% ceiling, a committee headed by Economic Affairs Secretary Arvind Mayaram has recommended that FDI limit be raised to 49% in almost all sectors through automatic route.

The committee has suggested that FDI in defence be raised to 49% under the government approval route, from 26% at present.

Besides, it has proposed to increase FDI cap to 74% and 100% in multi-brand retail trading and telecom sector.

Recently, Sharma and Chidambaram were on a four-day visit to the US to woo foreign investments.

FDI inflows in 2012-13 aggregated $22.42 billion, a decline from $36.50 billion in 2011-12.