The Indian government will abolish a "restrictive" clause impeding foreign firms from forging joint ventures with local partners, Prime Minister Manmohan Singh said Wednesday. Singh told a meeting organised by the Confederation of Indian Industry (CII), that his government had decided to drop a provision that had been a source of "some discomfort" for foreign investors.
The controversial Press Note 18 provision was issued six years ago as a regulatory safeguard to prevent conflict of interest in the event a foreign firm set up multiple joint ventures with Indian companies.
The foreign company had to get a "no-objection" certificate from its previous Indian joint venture partner before looking at any new joint project.
"I am happy to inform you that we will be doing away with the restrictive provisions of Press Note 18 for all future joint ventures with foreign partners," said Singh.
"Measures like Press Note 18 are an anachronism today, having outlived their purpose," he added.
"In the new dispensation, while the existing joint ventures will continue to be protected by a few provisions of Press Note 18, new joint ventures and collaborations will have to be shaped by commercial contractual agreements based on the free will of the partners without government interference."
Foreign firms welcomed the decision.
Comments
Comments are closed.