India Inc on Friday said RBI decision to impose restriction on outward investments would dampen global aspirations of domestic companies Reserve Bank’s restrictions on outward investments, CII said, “would be a dampener to India’s global aspirations”. It hoped that these measures would be revisited soon and status quo would be restored.
“To stabilise the rupee, it would have been more appropriate to initiate policies which prevent influx of non-essential imports such as coal and iron ore and augment forex inflows by encouraging FDI by promising a conducive and stable policy regime,” it said.Sharing similar views, Ficci said the markets today experienced a free fall and has not reacted well to the Central Bank’s restrictions on rupees flows offshore with heightened fears that more restrictions may come including for FIIs.
“These fears need to be addressed. After all India has never restricted dividend flows offshore or indeed sales of equity share proceeds even when the situation was more dire . The fall in the rupee essentially underlines weakness in the economic fundamentals,” Ficci President Naina lal Kidwai said. She hoped that RBI’s measures are temporary in nature and would be reversed once situation stabilises.