NEW DELHI: In initiatives that are set to give a fillip to foreign direct investment, the government has proposed to open up new avenues to overseas investors as well as promised a more conducive business environment with simpler rules. The FM has proposed to allow 100% FDI in asset reconstruction companies under the automatic route. Foreign investment up to 49% in the insurance and pension sectors, too, will not require prior government vetting while similar rules will be extended to more non-banking financial company (NBFC) activities. The announcement is in keeping with Prime Minister Narendra Modi’s agenda of pushing for minimum governance, and a continuation of reforms that took off in November last year. In another move that is expected to entice overseas investors, they will be allowed to own 100% stake in businesses marketing food products produced in India, but with clearance from the Foreign Investment Promotion Board. “The intent of the government is to put most items under the automatic route. Reasons: one is to reduce the time taken in getting these permissions and the second is to bring down compliances associated with FDI rules. Both help take forward the Make in India agenda,” said Paresh Parekh, partner, EY. The biggest push to Make in India is likely to come from FDI relaxation in food products marketing, opening the doors for increased investment in food processing infrastructure and creation of large scale jobs. The share of food processing in manufacturing sector GDP was 9.8% in 2012-13, and it is likely to rise significantly. Foreign investors have lauded the move to accord them residency status, which will save them the hassle of reviving business visas every five years. “Foreign investors should be allowed to stay in India to make in India … this was a very simple yet long-overdue move,” said a senior company executive who did not wish to be named. The basket of eligible instruments that foreigners now have to invest in India will be expanded to include hybrid instruments. “We have yet to see the fine print … but most steps are incremental in nature and not path-breaking,” EY’s Parekh added. The Centre State Investment Agreement to ensure effective implementation of bilateral investment treaties signed by India with other countries will become an additional area for state governments to improve their investment climate. Manish Sharma, president of the Consumer Electronics and Appliances Manufacturers Association, sees benefits to the electronics sector from the government’s move. “The government’s plan to attract FDI to invest in the Make in India proposition will help provide a fillip to the electronics sector and help us enhance technology proliferation and indigenous manufacturing.”