FDI rejig on the cards

Under the proposal, from 13 categories, trading activities would be categorised under sourcing of exports, trading of items sourced from small-scale industry under technology arrangement and under the category of test marketing up to two years subject to setting up of manufacturing facilities.

Under the existing policy, though the government has allowed FDI up to 100 per cent for cash-and-carry in wholesale trading, the limit for automatic approval in export trading activities is pegged at 51 per cent.

The government could also hike the FDI limit in diamonds gems and jewellery from 74 to 100 per cent and put in on the automatic route.

It was in November 2005 that the cabinet referred the commerce ministry8217;s proposal to streamline FDI approvals in various sectors to a group of ministers.

In petroleum marketing, the proposal under consideration is now is to hike the FDI limit from 74 per cent to 100 per cent and put all FDI inflows in permissible activities under the automatic route. In addition to this, under the policy that is expected to be put forward to the cabinet, the government also plans to dispense with the divestment clause for investments in natural gas and LNG.