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The government has notified the decisions on liberalising foreign direct investment (FDI) regulations in single brand retail, coal mining, contract manufacturing and digital media taken by the Cabinet late last month but clarity has not yet been provided on the definition of digital media and related issues.
According to the press note 4 of 2019 issued by the Department for Promotion of Industry and Internal Trade (DPIIT) under the Commerce and Industry Ministry on Wednesday, all the decisions on FDI regulations will take effect from the date of FEMA notification.
The Union Cabinet, on August 28, relaxed several FDI rules in areas such as single-brand retail, contract manufacturing, coal mining and digital media in line with the announcements made in the Union Budget.
In digital media, the government’s decision to allow 26 per cent FDI, created confusion as in the absence of any stated FDI limit on digital media so far, some existing companies already have FDI higher than the new limit. The policy allows 26 per cent FDI in print media and 49 per cent in the broadcasting sector.
Online media companies and web portals and content aggregators, who have FDI greater than 26 per cent, are keen to know the sectors that would be included in digital media as an inclusion would require them to shed the additional FDI.
However, press note 4 just specifies the FDI limit allowed in the digital sector, without any other details.
Other decisions notified by the government include relaxation in the domestic sourcing norms for single brand retail, allowing sourcing for exports and for global operations of the single-brand, to be counted towards the 30 per cent mandatory requirement.
Additionally, retail trading through e-commerce can also be undertaken prior to opening of brick and mortar stores, subject to the condition that the company opens brick and mortar stores within two years from date of start of online retail.
The decisions taken also include allowing 100 per cent FDI for sale of coal, coal mining activities including associated processing infrastructure subject to the provisions of Coal Mines (Special Provisions) Act, 2015 and the Mines and Minerals (Development and Regulation) Act, 1957.
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