Allowed FDI Investment in Different Sectors in India
- FDI cap in telecom raised to 100% from 74%; up to 49% through automatic route and beyond via FIP
- In defence production, too, the FDI cap is removed, subject to the approval of the Cabinet Committee on Security.
- 49% FDI limit in civil aviation
- 100% FDI allowed in single brand retail; 49% through automatic, 49-100% through FIPB
- Foreign investors in the insurance sector : government approval for a proposal to raise the limit from 26 per cent to 49 per cent has been pending.
- FDI up to 49% in petroleum refining allowed under automatic route.
- Raised FDI in asset reconstruction companies to 100% from 74%; of this up to 49% will be under automatic route
- 26 per cent limit in print or electronic media.
- FDI limit increased in credit information companies to 74% from 49%.
- In case of public sector oil refineries, commodity exchanges, power exchanges, stock exchanges and clearing corporations, FDI would be allowed up to 49 per cent under the automatic route as against current routing of the invest-ment through FIP
- FDI up to 100% through automatic route allowed in courier services
- FDI in tea plantation up to 49% through automatic route; 49-100% through FIPB route
- FDI in multi brand retail is 51% .Multi-brand retailers like Walmart and Tesco will now have to source 30 per cent of their products from small and medium enterprises only at the time of starting their business.
What is FIPB?
The Foreign Investment Promotion Board (FIPB) is a government body that offers a single window clearance for proposals on Foreign Direct Investment (FDI) in India that are not allowed access through the automatic route. FIPB is mandated to play an important role in the administration and implementation of the Government’s FDI policy. It plays important role in encouraging the flow of FDI into the country through speedy and transparent processing of applications, and providing on-line clarification. In case of ambiguity or a conflict of interpretation, the FIPB has always stepped in with an investor-friendly approach.
New Definition of Control in FDI
The government has approved a comprehensive definition of the term ‘control’ for the purpose of mergers and acquisitions involving overseas companies. ‘Control’ will include the right to appoint a majority of directors or to control the management or policy decisions, including by virtue of their shareholding or management rights or shareholders agreement or voting agreements.