Major impetus to job creation and infrastructure: Radical changes in FDI policy regime; Most sectors on automatic route for FDI
The Union Government has “radically liberalised” the FDI regime and opened up multiple sectors for 100 per cent FDI. Most of the sectors would be under automatic approval route, except a small negative list. With these changes, India is now the most open economy in the world for FDI.
Here are the sectors that are getting 100 per cent FDI now:
Food Products manufactured/produced in India: 100% FDI under government approval route for trading, including through e-commerce, in respect of food products manufactured or produced in India.
Defence Sector: With the new changes in policy, foreign investment beyond 49 per cent has now been permitted through government approval route, in cases resulting in access to modern technology in the country or for other reasons to be recorded. The condition of access to ‘state-of-art’ technology in the country has been done away with. The FDI limit for defence sector has also been made applicable to Manufacturing of Small Arms and Ammunitions covered under Arms Act 1959.
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Broadcasting Carriage Services: Teleports (setting up of up-linking HUBs/Teleports); Direct to Home (DTH); Cable Networks (Multi System operators (MSOs) operating at National or State or District level and undertaking upgradation of networks towards digitalisation and addressability); Mobile TV; Headend-in-the Sky Broadcasting Service (HITS) have all been opened up to 100 per cent FDI. For infusion of fresh foreign investment in cable betworks beyond 49% in a company not seeking license/permission from sectoral Ministry, resulting in change in the ownership pattern or transfer of stake by existing investor to new foreign investor, FIPB approval will be needed.
Civil Aviation Sector: The present FDI policy on Airports permits 100 per cent FDI under automatic route in Greenfield Projects and 74 per cent FDI in Brownfield Projects under automatic route. FDI beyond 74 per cent for Brownfield Projects is under government route. It has now been decided to permit 100% FDI under automatic route in Brownfield Airport projects. For Scheduled Air Transport Service/ Domestic Scheduled Passenger Airline and regional Air Transport Services, it has now been decided to raise the limit to 100 per cent with FDI up to 49 per cent permitted under automatic route and FDI beyond 49 per cent through Government approval. For NRIs, 100% FDI will continue to be allowed under automatic route. However, foreign airlines would continue to be allowed to invest in capital of Indian companies operating scheduled and non-scheduled air-transport services up to the limit of 49% of their paid up capital and subject to the laid down conditions in the existing policy.
Animal Husbandry: FDI in Animal Husbandry (including breeding of dogs), Pisciculture, Aquaculture and Apiculture was allowed 100% under Automatic Route under controlled conditions. It has been decided to do away with this requirement of ‘controlled conditions’ for FDI in these activities.
Pharmaceutical: The government already has 100 per cent FDI under automatic route in greenfield pharma and FDI up to 100% under government approval in brownfield pharma. With the objective of promoting the development of this sector, it has been decided to permit up to 74 per cent FDI under automatic route in brownfield pharmaceuticals and government approval route beyond 74 per cent will continue.