The government on Thursday liberalised FDI norms for banking, petroleum and scientific and technical journals. However, the Cabinet deferred a decision on raising the ceiling of foreign investments in telecom sector. Announcing the decisions taken at the Cabinet meeting, Parliamentary Affairs Minister Sushma Swaraj said that FDI limit in private banks has been raised to 74 per cent from 49 per cent now. While this would also include portfolio investment and funding from NRIs, it would be subject to mandatory credit rating by investors and RBI clearance. However the 26 per cent ceiling for FDI in insurance sector would also apply on private banks that operate in the insurance business. In the area of scientific and technical journals, the foreign investment cap has been hiked to 100 per cent from the existing 74 per cent. In the case of oil marketing, the cap has been raised to 100 per cent from 74 per cent at present and it would be done through the automatic route. Asked about the proposal for raising the foreign investment ceiling in the telecom sector, Swaraj said the issue has been deferred but she did not give the reasons for this. The FDI ceiling has been raised to 100 per cent in petroleum marketing (from 74 per cent now), pipelines for oil and gas (from prevailing 51 per cent) and unincorporated and incorporated joint ventures in the area of oil exploration. Further, the foreign approval in all these areas would come through the automatic route instead of the present system of clearance from FIPB. However, in the case of natural gas, the investment would have to be cleared through FIPB. Swaraj also said that foreign investment in refineries in PSUs would continue to be capped at 26 per cent while the 100 per cent FDI in private refineries could now come through the automatic approval route. The minister said 100 per cent FDI approval in printing of scientific and technical magazines, which would be through the FIPB route, would be subject to compliance with the legal framework as applicable and guidelines issued in this regard from time to time by ministry of information and broadcasting. She said that the revision of FDI limits would create an enabling environment for FDI inflows along with infusion of new technologies and management practices, resulting in enhanced competition.
