Why India Is Loosing FDI Investments?
Explaining the importance of SME sector, Devesh Kapur writes that the SME sector is crucial for creating new job and professional opportunities. The SME sector also creates a healthy environment for competition and can act as an active catalyst in grabbing the attention of big companies. But the growth rate of the SME sector in India has not been impressive over the years as the FDI norms of the Indian government are not yet that liberal to attract FDI on large scale. Kapur considers that government needs to make policy changes to lower the obstacles to FDI, from sectoral caps on foreign control to transfer pricing to taxation rule.
Few of the unfortunate traits of the government of India are baffling which directly hinders the prospect of FDI in the country. Like till date the government would insist on spending tens of billions of dollars on defence imports but refuse to raise FDI sectoral caps on defence, thereby undermining both its long-term defence preparedness and domestic manufacturing capabilities, all in the name of protecting poorly-performing public-sector defence units.
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