U.S. companies will benefit: Congress

June 21, 2016 02:35 am | Updated December 04, 2021 11:02 pm IST - NEW DELHI:

The Central government’s “sweeping” reforms in foreign direct investment triggered criticism from the Opposition parties on Monday.

While the Congress urged caution saying the reforms were a “big threat” to national interest, the Communist Party of India (Marxist) described them as a “consequence” of India’s recent defence agreement with the U.S. Soon after the government announced the changes easing FDI rules for defence, aviation and pharmaceutical sectors, Prime Minister Narendra Modi praised the move, saying it would provide a “major impetus to employment and job creation”.

But senior Congress leader and former Defence Minister A.K. Antony attacked Mr. Modi saying the reforms would “affect India’s independent foreign policy”.

“Allowing 100 per cent FDI in defence sector means India’s defence sector is thrown mostly into the hands of NATO-American defence manufacturers,” Mr. Antony said in a strongly worded letter.

A partnership

Mr. Antony said the development should be examined in the light of Mr. Modi’s recent visit to the U.S. where he issued a joint statement with his counterpart, President Barrack Obama. “It looks like India has become a security partner of America. The joint statement says that both India and America will work together as equal partners for peace and security of Asia-Pacific region.”

He said that after the Modi-Obama joint statement, India’s cooperation with the U.S. had changed from “a friendly nature to a partnership”, which, he said, will affect India’s relations with its “natural friendly” countries, including those in West Asia.

Expressing similar concerns, the CPI(M) said in a statement that India is permitting foreign capital to “reap super profits” and to help the U.S. come out of its global economic crisis at the “expense of our domestic economy”.

The CPI(M) also criticised India joining naval exercises with the U.S. and Japan in the South China Sea.

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