Cabinet defers decision on FDI in pharma, construction sectors, again

Our Bureau New Delhi | Updated on March 12, 2018 Published on November 28, 2013

Okays 4-year WTO peace clause to secure food security plan

India’s stand to ring-fence its food security plan at the World Trade Organisation’s Inter-Ministerial Meeting to be held in Bali next month received the Cabinet nod today.

Although there was no official briefing on the Cabinet decision, it is understood that the Government has agreed on the four-year ‘peace clause’, with certain conditions.

Interim solution

According to sources, the condition is that the ‘interim solution’ (four-year peace clause) must remain in force until a permanent solution is reached.

This proposal will protect India’s food security plan from WTO penalties even if 10 per cent subsidy cap is breached. If it is accepted India would endorse the Trade Facilitation Agreement.

For the second time in a week, decisions related to the tightening of FDI norms in pharmaceutical sector and further liberalising the rules for the construction development sector were deferred, Manish Tewari, Minister for State Information & Broadcasting (independent charge), told reporters after the Cabinet meeting here.


The proposal for pharmaceutical sector before the Cabinet was for splitting the sector into three groups — greenfield, or new, projects that will continue to enjoy 100 per cent FDI through the automatic route; brownfield, or existing, projects manufacturing critical or rare drugs can now get foreign capital only up to 49 per cent (FDI and FII together), and other existing projects can continue to get 100 per cent FDI.

Housing sector

To boost investment in the construction development sector, the proposal says minimum area and capital requirement for serviced housing plots and construction development projects are to be halved, or even lower.


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Published on November 28, 2013
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