Govt mulls scrapping cap on foreign investment in coal mining

Bloomberg New Delhi | Updated on August 28, 2019 Published on August 28, 2019

Other proposals under consideration include raising investment limits in digital media and easing rules for retailers selling a single brand

The Centre has moved a step closer to scrapping a cap on foreign investment in commercial coal mining, a person with direct knowledge of the matter said, as part of efforts to boost economic growth.

The proposal is being discussed at a Wednesday meeting of the cabinet, led by Prime Minister Narendra Modi, and a decision may come within hours, the person said, asking not to be identified because the discussions are private. The change would allow overseas miners such as BHP Group Ltd. and Glencore Plc. to own 100 per cent of mining companies. Other proposals under consideration include raising investment limits in digital media and easing rules for retailers selling a single brand, the person said, without giving details.

A spokeswoman at Commerce and Industry Ministry was not immediately available for comment. The ministry is piloting the proposals at the cabinet meeting.

The proposal to ease foreign investment rules in coal mining has been discussed for more than a year. A decision to finally approve the plan comes as the Prime Minister tries to lure overseas investors to an economy that’s growing at the slowest pace in five years. Last week Finance Minister Nirmala Sitharaman announced several measures to kick start an economy that recently lost its spot as the worlds fastest growing.

While most developed nations are turning away from fossil fuel, demand is rising in India. Opening up coal mining could tackle fuel shortages and revive growth in Asia’s third-largest economy which expanded at 5.8% in the March quarter, the slowest pace since 2014. Data due Friday will probably show gross domestic product slowed further, expanding 5.7 per cent in the quarter ended June 30.

As part of a plan to reverse the slowdown, Sitharaman exempted foreign portfolio investors from super-rich tax, lifted a ban on the government from purchasing new vehicles and announced front loading fund infusion in public sector banks.


The easing of rules on retailers could prompt Apple Inc. to set up stores in the country. The sourcing stipulation has been a sore point for many companies including Apple which are eager to enter India, the fastest-growing smartphone market in the world, and tap a larger share as China stagnates.

Published on August 28, 2019
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