Since export growth depends on the existence of a solid production base in stimulus sectors, which could expand to meet new growth needs, incentives in these areas of impetus have been provided through the streamlining of foreign investment procedures. The Foreign Investment Promotion Board (FIPB) has been revised to make foreign investment rules and regulations more transparent. The first guidelines for the approval of foreign direct investment by the FIPB were announced in order to accelerate the approval of foreign investments in areas not covered by automatic approval. Priority areas for the admission of 100% foreign participations have been identified. An expanded list of 46 industries eligible for automatic approval of up to 51% foreign equity, three mining-related industries eligible for automatic approval, up to 50% foreign equity, and another set of nine industries eligible for 74% foreign equity was announced by the government. The ceiling on individual holdings by foreign institutional investors (FIIs) in a company has been increased from 5% to 10% of the company`s shares, while the overall limit has been increased from 24% to 30%. IFIs have also recently been allowed to invest in unlisted companies. For automatic approvals by the Reserve Bank of India (RBI), it is no longer necessary for the amount of foreign equity to cover foreign exchange requirements for the import of capital goods necessary for the project. In order to create flexibility in the supply of technology imports, technology transfer has been decoupled from equity investments.
Article IV of the GATS makes a clear commitment to increase the participation of developing countries in trade in services. The agreement also recognizes the fundamental asymmetry in the level of development of the services sector in both developed and developing countries and commits developed countries to take concrete steps to strengthen the domestic services sector of developing countries and ensure effective market access in sectors and modes of interest to developing countries` exports. However, the GATS objectives of increasing the participation of developing countries in trade in services have been largely unmet. Therefore, in order to achieve the necessary balance in the GATS and to increase the participation of developing countries in trade in services under Article IV of the GATS, developed countries should make a higher level of commitments with respect to the movement of natural persons and other areas of export interest of developing countries. (iv) the presence of natural persons, which includes facilities provided by a service provider of one country through the presence of natural persons in the territory of another country; e.B. a company that sends its engineers for on-site work in the United States/Europe or Australia. In the Uruguay Round, India blocked 67% of all its tariff lines, whereas previously only 6% of tariff lines were linked. Bonds range from 0 to 300% for agricultural products from 0 to 40% for other products. In the Uruguay Round, 25 per cent of finished products were linked to intermediate products and 40 per cent to finished products.
Among import policy issues, quantitative restrictions, particularly in the textile sector, are one of the main non-tariff barriers affecting Indian trade. As the MFA expires, there is some backloading when it comes to points of interest for India. Another problem in the textile sector arose from the introduction of new “country of origin rules” by some of our major trading partners, which limited the flexibility of Indian exporters to equip clothing and textile articles from other countries for export to trading partners who invoked these rules. Many restrictions on Indian agricultural products for sanitary and phytosanitary reasons are often not supported by adequate scientific justification. Even so-called environmental bans, such as those harvested for Indian seafood harvested without certain environmental protections that some trading partners insist on, do not appear to be supported by sufficient scientific evidence. The restrictive visa regime in several developed countries has proven to be a deterrent to exports in the services sector by our professionals, especially in the software sector. Repeated anti-dumping investigations on the same articles, apart from the special exemption provided for in Article 15 of the Anti-Dumping Agreement, have proved to be extremely disruptive to our external trade. In addition, the five-year plan (1992-97) called for the evolution of India`s trade policy regime “towards greater openness and full use of the benefits of international trade”.
This objective must be achieved through (i) a reduction in the “negative” list of imports and exports, (ii) a gradual reduction in tariffs and (iii) other trade policy reforms. Removing infrastructure bottlenecks was another key element of the trade reform package. In the telecommunications sector, significant progress has been made in the participation of the private sector in value-added services such as mobile, mobile and paging services. A telecommunications regulator was established in March 1997, which will separate regulatory functions from policy formulation and operational functions. New guidelines allow private participation in ports, investments on a B.O.T. basis and approval has already been granted for a private container terminal worth Rs 70 billion. New guidelines for private investment in the motorway sector were also announced, procedures were simplified and environmental impact assessment and equity participation were facilitated. A rail-based rapid transit system (MRTS) has been approved in Delhi, and the cities of Bangalore, Hyderabad, Mumbai and Kolkata have proposed significant improvements to their public transport system through the introduction/expansion of rail public transport systems.
A new policy of private investment in civil aviation has been announced, including the approval of 40% of the capital of national airlines. Currently, India`s trading system and regulatory environment remain relatively restrictive. .