Why in the news?

• In order to ensure the enhanced technology transfer, local value-addition and innovation, Centre is analysing foreign direct investment (FDI) inflows to introduce specific provisions in the new industrial policy and the FDI Policy.

More on news

• The discussion paper on a future-ready industrial policy had already recommended a review of the current FDI regime.
• According to the sources, Centre is analysing the (FDI) inflows sector-wise, region-wise (within India) and country-wise.

• They further added that they  are looking at global practices, including regulations in countries such as Israel and China regarding transfer of technology, domestic value addition and promotion of innovation. The inputs will be fed into the concerned policies.
• The analysis is being done with the help of ‘Invest India’ — the government’s investment promotion and facilitation agency.
• According to the August 2017 discussion paper by the Department of Industrial Policy and Promotion, while the FDI policy had largely aimed at attracting investment, “benefits of retaining investments and accessing technology have not been harnessed to the extent possible.
• The discussion paper further said the “FDI policy requires a review to ensure that it facilitates greater technology transfer, leverages strategic linkages and innovation.”

As a long-term measure, the paper pitched for an FDI regime that balances short-term and long-term benefits of inward and outward investments. It said in the medium-term, what should be looked at is, “How can the FDI policy channelise investments into the potential sectors to increase domestic value addition,enable brand building and strengthen (global) linkages".

Source

The Hindu.