DIPP notifies liberalised FDI rules in 15 sectors

Amiti Sen New Delhi | Updated on January 22, 2018 Published on November 24, 2015

Sectors with easier FDI norms include defence, civil aviation, retail, plantation, construction development, broadcast, manufacturing, private sector banking

The Government has notified measures to ease and simplify the foreign direct investment (FDI) rules in 15 sectors that were announced by the Finance Minister, Arun Jaitley, a day before Diwali.

The decision to raise the threshold limit for approval by the Foreign Investment Promotion Board (FIPB) to ₹ 5,000 crore from ₹ 3,000 crore has also been notified by the Department of Industrial Policy & Promotion (DIPP) on Tuesday.

The sectors, where rules have been eased, include defence, construction development, broadcasting, civil aviation, agriculture, plantation, limited liability partnerships, manufacturing, single-brand retail and private sector banking.

Fillip to e-commerce

In a boost to e-commerce, the new FDI rules now allow all manufacturers in the country — with or without foreign investment — to sell their product through wholesale and/or retail, including through e-commerce without government approval.

In broadcasting content services, including FM radio and up-linking of ‘news & Government route current affairs’ TV channels, the FDI cap now stands at 49 per cent from 24 per cent.

In addition to tea plantation, up to 100 per cent FDI is now allowed in some other plantation sectors like coffee, rubber, cardamom, palm oil tree and olive oil tree.

Defence FDI

In the defence sector, foreign investment up to 49 per cent is now under automatic route, instead of being routed through FIPB. Proposals over 49 per cent will be scrutinised by FIPB.

One of the conditions attached to the FDI in defence is that, infusion of fresh foreign investment within the permitted automatic route level, in a company not seeking industrial licence, resulting in change of the ownership pattern, or transfer of ownership to a new foreign investor, will require government approval.

Single-brand retail

In the area of single-brand retail, the government has clarified that for ‘state-of-art’ and ‘cutting edge technology’, the 30 per cent sourcing norms can be relaxed subject to government approval. The same entity to carry will now be allowed to carry out both wholesale and single-brand retail trading.

In the construction development sector, the requirement of minimum capitalisation of $ 5 million within the period of six months of commencement of business and conditions of area restriction has been removed.

Published on November 24, 2015
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