• SHISHIR GUPTA: We have with us Union Minister for Commerce & Industry Kamal Nath, a seven-time MP and a mass-based politician. In his constituency Chhindwara (in Madhya Pradesh), he is known as Chhindwara Gandhi. He’s a go-getter and can answer any question — ask him about Gujarat, he was in charge of the Congress election campaign there; ask him about FDI, WTO, anything! You have a cabinet note on economic affairs on FDI. There’s talk of opening up 100 per cent FDI in titanium, FDI in multi-brand retail. There’s a cabinet note on relief to our exporters. I’m told you have written to the prime minister. When is all this happening? What’s holding you back? Is it the Cabinet or is it the Left?

Thank you, Shishir. But first, before I answer questions, for those who do not know, this building is very familiar to me. I was director of The Indian Express for one and a half years. I’m coming here after a long time. Much has changed since then in this country.

To put this in perspective, India’s FDI regime is one of the most liberal, if you look at the FDI policies in other Asian countries, even Europe and the U.S. It’s not about what you are allowing; it’s about the conditions set in allowing it. You can’t go into civil aviation in the U.S. — even a few percentage points! In New York, I was asked a question on FDI and I countered: When will you allow FDI in civil aviation? We have one of the most liberal FDI regimes in the world. What we don’t have is FDI in a few sectors like retail and defence. But in telecom we allow up to 74 per cent, which few countries would allow. The U.S. would not allow that. The same people who are preaching to us do not have as liberal FDI norms as we do. And if they do allow FDI, the conditions they attach are insurmountable. In Asian countries, the conditions are — get this and that approval, security clearance from various agencies. If it’s allowed, it’s allowed: there must be no element of frustration. From $ 1 billion to $ 2 billion four years ago, last year we got $ 15.7 billion. But there are clauses in FDI policy that say an investor is allowed to put in 74 per cent, but in five years he must disinvest to 51 per cent! These are retrograde policies. Investors say, ‘What the hell, we don’t want to invest!’ To answer your question, the cabinet is going to correct these anomalies, to open up some sectors that were not allowed, such as titanium, because they were strategic minerals. There’s a huge proposal for a titanium project (the Boeing project). There are issues about FDI in retail, and the question is about big versus small. What is the amount that will not rock the boat for the small retailer? For in India retail is complex and is also the largest employer.

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