21 October, 2020

What's That Stink?

Business houses protest the proposed scrapping of a clause that has protected Indian firms with foreign tie-ups

Jitender Gupta
What's That Stink?
outlookindia.com
-0001-11-30T00:00:00+05:53
Press Note 18. It's a one-page note issued by the Union industry ministry on December 14, 1998. For foreign firms, the three clauses are meant to act as guidelines "pertaining to the approval of foreign/technical collaborations under the automatic (FDI) route with previous ventures/tie-ups in India." While it looks like any other clarification, the seemingly harmless paragraphs have created a furore in both political and business circles. Foreigners see it as the most obnoxious entry barrier and the biggest impediment to FDI inflows; Indian industry views it as a protector of its interests in the ugly—and often unfair—tussles with foreign partners; and politicians take a stand depending on whether they want to be viewed as pro-reforms or anti-reforms, pro-MNCs or against them.

Almost everyone has a view on Press Note 18. Now that the government plans to scrap it, the debate on it has acquired a nationalist tone and the battle is being billed as swadeshi vs videshi. The critics of the note include the two reformers—PM Manmohan Singh and FM P. Chidambaram—and foreign...
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