The Union Cabinet on Wednesday approved a number of amendments in the Foreign Direct Investment (FDI) policy, in a move to liberalise and simplify it. In a press release, the government said the amendments will help improve ease of doing business in the country and in turn, facilitate larger FDI inflows contributing to the growth of investment, income and employment. The Cabinet meet was chaired by Prime Minister Narendra Modi.
Full list of amendments in the FDI policy
* 100 per cent FDI under automatic route for Single Brand Retail Trading (SBRT): Government approval is no longer required for FDI in SBRT. The policy had previously allowed only 49 per cent FDI under automatic route, while FDI between 49-100 per cent mandated government approval.
* 100 per cent FDI under automatic route in Construction Development: Real-estate broking service does not fall under the ambit of real estate business and is now eligible for 100 per cent FDI under automatic route.
* Foreign airlines allowed to invest up to 49 per cent under approval route in Air India: Foreign airlines were previously allowed to invest capital under Government approval route in Indian airline companies, excluding Air India. Now, foreign companies can invest up to 49 per cent under approval route in Air India as long as it does not exceed 49 per cent directly or indirectly. Also, substantial ownership and effective control of the company will remain vested in India national.
* IIs/FPIs allowed to invest in Power Exchanges through primary market: Previously, the policy allowed 49 per cent FDI under automatic route in Power Exchanges. FIIs/FPIs are now allowed to invest in Power Exchanges through the primary market as well.
* Definition of ‘medical devices’ amended in the FDI Policy: The definition of ‘medical devices’ has been amended in the FDI policy on pharmaceuticals.