To open up or not: What CEOs think about easing FDI rules

There was a surprise element at Business Today's CEO Lunch held in the Le Meridien hotel in New Delhi on Monday.

The topic of the discussion was "India's FDI stance: Free or Calibrated Approach to Opening Up?"

Amid a gathering of the industry's top veterans was Kashmiri Lal, National Coordinating Secretary of the Swadeshi Jagaran Manch, the economic wing of the Sangh Pariwar. Lal talked about how companies like American agriculture firm Monsanto and retail major Wal-Mart were sharks and he would rather shut them down than allowing them to open shops.

But he was not all that against the concept of foreign direct investment, and said that the government should bring out a white paper on the subject.

"The government should look at the past 20 to 22 years of FDI and see how it has impacted the nation," he says. Shachindra Nath, Group CEO of Religare Enterprises, had some disagreement with Lal but he did agree that FDI should not be allowed in retail immediately.

"India will be ready in FDI in retail in20 years," he says. But there was another voice in the house which felt otherwise.

"It will, if local sourcing (from farmers) is done properly. It will help the farmers," says Subroto Das, head of WD India, a global storage company. Das also said that FDI would create more jobs and bring in more technology into the country. Nath also said that FDI should be put to use to grow entrepreneurship. However, Religare will be directly affected once the government eases FDI rules.

Religare has an insurance business, and the government has recently increased the FDI limit in the insurance and the defence sectors from 26 per cent to 49 per cent. Pratyush Kumar, President of Boeing India, said that FDI should be completely opened up and not capped. Boeing makes defence equipment. "Capital chases returns… From 26 per cent to 49 per cent is a step in the right direction," he said.

Others who were there included Amar Sinha, Executive Director of Wave Infratech; Chhitiz Kumar, Head of Philips Capital; Rohit Bansal, Co-founder of Snapdeal; and Rahul Khanna, Managing Director of Canaan Partners. Josey Puliyenthuruthel, Managing Editor of Business Today, moderated the discussion.

*An earlier version of this story mentioned name of Executive Director of Wave Infratech incorrectly.