While the Indian economy seemed to have recovered from the demonitisation drive, the year began on a promising note with India making it to the sixth position in a global list of top eight great powers in 2017. Although political parties are gearing up for upcoming crucial elections in four Indian states, the Government kept its focus on foreign direct investment (FDI), mulling on options to increase limits in print and single brand retail sectors.

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Sixth Great Power – The American Interest, a US based magazine, has ranked India at the sixth spot, in the exclusive list of eight great powers in 2017. The magazine had high words of praise for India although it did not shy from criticizing certain Government policies. The magazine’s generous comments mentioned below are quite heartening –

Like Japan, India is often overlooked in lists of the world’s great powers, but it occupies a rare and enviable position on the world stage. India is the world’s largest democracy, home to the second-largest English-speaking population in the world and boasting a diversified and rapidly growing economy. On the geopolitical front, India has many suitors: China, Japan and the United States are all seeking to incorporate India into their preferred Asian security architecture, while the EU and Russia court New Delhi for lucrative trade and defense agreements. Under the leadership of Narendra Modi, India has deftly steered its way among these competing powers while seeking to unleash its potential with modernizing economic reforms.

From the Middle East and East Africa to Southeast Asia, India is making its presence felt in both economics and security policy in ways that traditional great powers like Britain and France only wish they could match.”

United States is ranked at the top position in this list, followed by China and Japan who are tied at the second spot. Russia and Germany are placed at fourth and fifth positions respectively. Iran is ranked seventh and Israel at eighth rank completes the list.

Strategic Pacts with United Arab Emirates (UAE)The UAE and India signed 14 pacts, including defense and energy, as part of groundwork for a strategic partnership between the two countries. The pacts were signed following a meeting between Sheikh Mohammad bin Zayed Al-Nahyan, crown prince of Abu Dhabi and deputy supreme commander of the UAE Armed Forces, and Indian Prime Minister Narendra Modi in New Delhi last week.

The agreements aim at establishing cooperation in defense manufacturing and technology, research, innovation, and cooperation between public and private sector institutions of the two countries. The two countries will also collaborate in armaments, defense industries and transfer of technology. In a joint statement issued at the end of the state visit, the two leaders reviewed the progress in realizing the $75 billion target for UAE investments in India’s plans for rapid expansion of next generation infrastructure development. The Abu Dhabi National Oil Company (ADNOC) and the Indian Strategic Petroleum Reserves Ltd. (ISPRL), agreed to establish a strategic crude oil storage in the southern Indian city of Mangalore. ADNOC will store about 6 million barrels of oil at Mangalore, taking up about half of the site’s capacity

Proposed Changes in FDIThe government is working to remove all anomalies which are restricting FDI into the country. Secretary in the Department of Industrial Policy and Promotion (DIPP) Ramesh Abhishek said that there are certain “sectoral regulations which are not in conformity” with the FDI policy.

The government is considering a proposal to increase FDI limit in print media sector to 49 per cent from 26 per cent at present. Currently, the FDI policy permits 26 per cent foreign direct investment in the publishing of newspapers and periodicals dealing with news and current affairs through government approval route.

The government is considering allowing 100 per cent FDI through automatic route in single brand retail to attract a larger number of global players in the sector. According to sources, there is a proposal to allow 100 per cent FDI in single brand retail sector “through automatic route” with certain conditions. Currently, FDI up to 49 per cent is permitted under the automatic route but beyond that limit, government’s nod is required. Foreign investment is allowed subject to certain conditions, which require products to be of a ‘single brand’ only and to be sold under the same brand globally.

Posted by Sourish Mohan Mitra

Sourish Mohan Mitra, India-qualified lawyer from Symbiosis Law School, Pune and currently working as an in-house counsel in Delhi, India; views expressed are personal; he can be reached at sourish24x7@gmail.com; Twitter: @sourish247

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