The Centre was likely to open up five more sectors for 100 per cent foreign direct investment through the automatic approval route within the next one month and was awaiting approval of the Cabinet, industry ministry sources said.
The five sectors, where FDI would be allowed were power trading, processing and warehousing of rubber and coffee, coal, greenfield airports and petroleum infrastructure, sources told reporters on the sidelines of a CII Partnership Summit 2006 in Kolkata.
They said that the Group of Ministers on the subject had suggested opening up of the five sectors for 100 per cent FDI, adding that the Cabinet was expected to approve the same before the announcement of the Budget in February.
The idea of opening up more sectors to FDI was to attract more foreign capital, sources said, adding that the government was also keen to reduce the levels of control in most sectors of the economy.
As power trading was not recognised as an activity in the old Electricity Act, it was now been treated the same under the Electricity Act 2003, sources said.
Once 100 per cent FDI was allowed in power trading, then regional imbalances in power resources would be eliminated and tariff levels would also come down. However, he said that more investments needed to be made in transmission so that foreign funds were attracted in this sector.
Regarding greenfield airports, he said that all new projects would be included. Sources said that marketing of petroleum infrastructure would also be opened up for 100 per cent FDI.
Sources said these steps were being taken to augment FDI flows into the country. Last year, India attracted $5 billion as FDI, while neighbouring China had absorbed $60 billion.
With most of the sectors going for automatic approval, the role played by Foreign Investment Promotion Board was also being reduced, sources said.
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