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More relaxations in foreign direct investment (FDI) and some ‘quick reforms’ to boost India’s business-ready image are likely to be on the new government’s agenda, a senior official said Saturday. “It is quite possible under the new government that we attempt further liberalisation of FDI of any pockets where there is potential,” secretary in the department for promotion of industry and internal trade (DPIIT) Rajesh Kumar Singh said at the CII annual business summit in Delhi. He said India’s FDI regime is one of the most liberal in the world and more open than southeast Asian nations with whom India is often compared.

Besides FDI, the government is also looking at some ‘quick reforms’ in the run-up to the World Bank’s Business Ready Report survey to boost India’s overall performance. India’s survey for the Business Ready Report will begin in September. It will involve a new set of indicators that will cover ease of entry, ease of operating and ease of exit. The rankings have a signalling impact on foreign investors and “we have to ensure that we do not regress and continue to improve”, Singh said.

The DPIIT secretary also indicated a move towards lower import duties and efforts to deal with inverted duty structure and other distortions in taxation. “There are many commodities both on the GST side and customs side where inversion in the tax regime should be corrected. We can’t have an inverted duty structure that has an impact on our competitiveness and affects our export capabilities,” he said.

“The DPIIT is conducting a cross-sectional study—through both the GST Council and finance ministry—to ensure we rationalise and remove those inversions to improve the competitiveness of our manufacturing sector,” Singh said.

He said India would become less conservative when it comes to free trade agreements (FTAs) and industry should prepare itself for lower duties in the long run. Singh underlined the production linked incentive (PLI) scheme as a centrepiece of India’s industrial policy that has catalysed Rs 1.13 trillion investments, Rs 9 trillion sales, exports of Rs 3.5 trillion and over 8 lakh direct jobs.

The government last month liberalised FDI norms in the space sector—which in the past has been considered sensitive and strategic— allowing up to 100% foreign ownership of companies involved in different activities around it.

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