Panel of secretaries working on simplification of FDI rules: Piyush Goyal

A reduction in the basic customs duty of gold to 6 per cent (from 15 per cent) will reduce smuggling, said Union minister Piyush Goyal

A government panel is working on simplification of foreign direct investment (FDI) rules, including speed of approval of proposals as well as switching to an automatic approval mode, Commerce and Industry Minister Piyush Goyal told Shreya Nandi in New Delhi in a post-Budget interview. Edited excerpts:

The Budget talks about simplification of FDI rules…

We have worked out a few things that the committee of secretaries is examining. There will be simplification in terms of processes, procedures, and speed of approval. We could put some items in automatic approval mode instead of (government) approval mode. It’s a mixed bag, there are many things there. They will put it up with the finance minister, then the Prime Minister, and then it will go for Cabinet approval.

Does it mean that Foreign Investment Promotion Board (FIPB) type of a structure will be back again to speed up FDI proposals’ approval process?

I don't know what will happen and what will not happen.

There has been a surge in gold and silver imports over the last few months. What’s the rationale behind the reduction in import duty?

A reduction in the basic customs duty (BCD) of gold to 6 per cent (from 15 per cent) will reduce smuggling. This decision was taken keeping a few things in mind. The wedding season is around the corner, plus now the economy is in a good shape. When the economy was in trouble, during Covid-19, we needed to put stronger curbs on gold imports. Now we are in a strong position, foreign exchange reserve is strong. When formal gold is imported (through the official route), it only helps our economy further, in the sense that it is a part of our wealth creation. Duty reduction in gold and silver will result in employment and business growth. Value addition in gold jewellery will also boost exports, including e-commerce exports.

To what extent is the decision on removing angel tax boost startups?

More importantly, there was always this concern about valuation since startup shares can’t be valued at book value or asset value. It is very often an idea value or potential value. You have to recognise and respect that the idea gets the value and not just the asset.

The Budget also talks about industrial parks and e-commerce export hubs…

People are saying it is only Bihar and Andhra Pradesh, but (the fact is) there are 12 industrial parks and they are all over the country. Often you announce only one or two as an example, but the details come in due course.

As far as e-commerce export hubs are concerned, we will start with 10-15 hubs, judge the interest of trade, business and exporters. If we get a good response, we will scale them up. We can identify that during consultation with the industry.

Q. Budget speech saw no mention of a production-linked incentive (PLI) scheme, but the customs duty structure was rejigged…

Well, the final print will be clearer after some time. But she (FM Nirmala Sitharaman) has talked about employment-linked incentives. There are different ways of incentivising manufacturing.

Customs duty rationalisation is expected over the next six months. Will there be proposals from the commerce and industry ministry?

We work as one government. As each of these schemes are rolled out, various ministries will come up with proposals. Pharma, chemicals and other industries may have some proposals.