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GOI eased Foreign Investment norms in 15 sectors

By
Puneet Kaur
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In a bid to boost up investment and speed growth GOI has eased Foreign Direct Investment (FDI) norms for 15 sectors which includes defence, broadcasting, construction, retail trade, agriculture, mining and banking.

  • The government’s decision to lift overseas investment ceilings for these sectors is an apparent move to turn India into a preferred destination for foreign investors.
  • Foreign investments > Rs.5, 000 crore in specified sectors need to approach the foreign investment promotion board for approval i.e. higher than the previous cap of Rs.3, 000 crore.

GOI eased Foreign Investment norms in 15 sectorsSectors Having Eased FDI Norms

  • Single Brand Entities – Govt relaxed norms for single-brand entities that require state-of-the-art technology that could help companies such as Apple Inc. to manufacture in India.
  • News Broadcasting – Foreign investment ceiling ↑ to 49% from 26% and 100% in non-news broadcasting.
  • Defence sector – Govt allowed foreign investment up to 49% under the automatic route i.e. without prior government approval. Any foreign investment > 49% or an investment that results in change of ownership will need government approval.
  • Limited liability partnerships (LLPs) – 100% FDI has been allowed under the automatic route.
  • Manufacturing Sector – Companies permitted to sell their products through the wholesale channel and retail routes including the e-commerce channel without needing any government approval.
  • Private Banks – FII or FPI can invest up to the sectoral cap of 74%, provided that there is no change in management and control.
  • Construction Sector – Govt has removed the restriction of a minimum floor area of 20,000 sq. m in construction development projects and minimum capitalization of $5 million to be brought in within the period of six months of the commencement of business.
  • Other sectors – FDI has been increased to 100% from 74% include non-scheduled air transport service, ground handling services, credit information companies, plantation sector, coffee, rubber, cardamom, palm oil and olive oil.