SECTION II: TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES: (4) BUSINESS ENVIRONMENT: Paragraph 39
"Most sectors are at least partially open to FDI, subject to a cap and specific conditions (Table AII.4). However, the number of sectors/activities in which FDI is prohibited increased during the review period (Table II.8)…"
Could the Indian delegation please explain the rationale behind this increased prohibition on the number of sectors/activities open to FDI?
Reply: The list of sectors prohibited under both the Foreign Exchange Management Act and FDI Policy as extant at the time of the earlier review, was subsequently consolidated under the FDI policy, which is available in the public domain. Only one additional sector i.e. "manufacturing of cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes" has since been added. This has aligned the policy with Government's earlier decision of not granting industrial licenses for fresh capacity in the sector.
