Government Eases Foreign Investment Norms in 15 Sectors Including Mining, Defence

New Delhi: Ahead of Prime Minister Narendra Modi's visit to the UK, the government has eased foreign direct investment norms in 15 major sectors in a bid to drum up investment and speed growth and also counter allegations that the PM's reforms drive is slowing.

The government has lifted the caps on FDI in the critical defence, banking and construction sectors, allowing 100 per cent FDI in completed construction projects, non-news channels through auto route, Teleports, DTH, Cable Networks and plantation of rubber, coffee, cardamom, palm oil tree, olive oil tree.

The announcement also came as PM Modi seeks to regain the political initiative after his Bharatiya Janata Party or BJP suffered a humiliating defeat on Sunday in the Bihar assembly election, which has reinvigorated opposition parties who have stalled the government's attempts to push key reforms.

It said the reforms were aimed at making it easier for overseas companies to do business in India and has increased the financial power of the Foreign Investment Promotion Board to give single window clearance for investment projects up to 50 billion rupees ($753.35 million) from 30 billion rupees.

"Investors prefer to invest in destinations where growth is picking up, returns seem likely and where it is easy to do business," said Finance Minister Arun Jaitley announcing the new measures.

He noted that India has been rated well on ease of doing business in the last month and that in "the last few months, growth in India is being driven by public investment and some private investment and increased FDI."

"The crux of these reforms is to further ease, rationalise and simplify the process of foreign investments in the country and to put more and more FDI proposals on automatic route instead of government route where time and energy of the investors is wasted," the government said in a statement.

The major reforms push comes two days after the ruling BJP suffered a crushing defeat in the Bihar assembly elections. The Bihar result fuelled fears of a further slowdown in economic reforms as it is expected to galvanise the opposition which has stalled the government's attempts to push key reforms.

Today's announcement also appeared to be a signal of intent ahead of PM Modi's first visit to Britain, where he will be seeking investment from the former colonial power.

"With this round of reforms, the government has demonstrated that India is unstoppable on the path of economic development," the commerce ministry said in a statement, adding, "The Prime Minister has reiterated that the economic wellbeing of the people of India is the main task before him."

PM Modi's government came to power in 2014 promising sweeping reforms to revive the faltering economy. Growth is now chugging along at seven per cent, putting India among the fastest-growing nations.