India has introduced an updated foreign direct investment (FDI) policy that simplifies joint venture rules and opens new areas for foreign funds, the country's trade ministry said on Thursday.
The step was taken amid a 25 percent decline in the foreign direct investments. According to the new rules, overseas firms in existing joint ventures can operate separately in the same business segment. Earlier, they needed prior approval from their Indian partners.
The policy also allows foreign investment for developing and production of seeds and planting material.
Other steps announced by the ministry include allowing conversion of non-cash items such as import of capital goods, pre-operative or pre-incorporation expenses to equity.
"FDI policy is part of ongoing efforts of procedure simplification and foreign direct investment rationalization, which will go a long way in inspiring investor confidence," Commerce and Industry Minister Anand Sharma said in a statement.
The move will "promote the competitiveness of India as an investment destination and be instrumental in attracting higher levels of FDI and technology inflows into the country," the federal trade ministry said in a release.
Foreign direct investment inflows into India for the 11 months from April 2010 to February 2011 amounted to $18.3 billion, a decline of 25% from the same period a year earlier.
NEW DELHI, March 31 (RIA Novosti)
