Wto Agreement And Its Effect On Indian Industries
Foreign investment has also been considerably simplified, with an expanded list of industries, including the automotive sector, in which foreign ownership of up to 51% or 74% can be automatic. Compulsory industrial licensing is now limited to nine industries, up from 18 in India`s previous revision; The list of items reserved for small-scale sector production has also decreased slightly. Agriculture is the oldest culture in all of human civilization. The history of agriculture in India goes back ten thousand years. The WTO succeeds the General Agreement on Tariffs and Trade (GATT), established in 1947. GaTT held a total of eight rounds. The WTO agreement on agriculture, known as the “international treaty,” was one of the largest agreements negotiated during the Uruguay Round, involving a total of 123 countries. The objectives of WTO legislation are to promote free and liberal trade. But there has been widespread abuse of this concept. Exporting countries have begun to sell their products to importing countries, which has posed a serious threat to the economies of developing countries, particularly to India`s agriculture. Given that export growth depends on the existence of a strong production base in growth sectors, which could expand to meet growth needs, the incentive was given in these areas by streamlining foreign investment procedures. The Foreign Investment Promotion Board (FIPB) has been revised to make the rules and rules governing foreign investment more transparent. The first guidelines for the approval of foreign direct investment by the FIPB have been announced in order to expedite the authorisation of foreign investment in areas that are not automatically authorized.
Priority areas for the admission of 100% foreign capital have been identified. The government announced an expanded list of 46 sectors eligible for automatic authorisation, up to 51% of foreign capital, three mining industries eligible for automatic authorisation, up to 50% foreign equity and another group of nine sectors eligible for 74% foreign equity. The ceiling on the holdings of individual foreign institutional investors (FIIs) in a company has been increased from 5% to 10% of the company`s shares, while the overall ceiling has been raised from 24% to 30%. In recent times, IFIs have also been allowed to invest in unlisted companies. For automatic approval by the Reserve Bank of India (RBI), it is no longer necessary for the amount of foreign capital to be covered by the foreign exchange requirements for imports of investment goods necessary for the project.