Govt. notifies changes in FDI policy

June 24, 2016 06:03 pm | Updated December 04, 2021 11:02 pm IST - New Delhi

The government today notified changes in the Foreign Direct Investment (FDI) policy in sectors including pharmaceuticals, defence and single-brand retail. These decisions were announced earlier in the week with a view to make India more investor friendly and an attractive FDI destination.

“The decision will take immediate effect,” the Department of Industrial Policy and Promotion (DIPP) said in a press note.

The changes in the policy include allowing 100 per cent FDI under government approval route for trading, including through e-commerce, in respect of food products manufactured and/or produced in India.

To attract investment in the defence sector, the government has removed the condition of ‘state-of-art’ technology, besides permitting foreign investment in manufacturing of small arms and ammunitions.

The government has also permitted 100 per cent FDI through automatic route in broadcasting carriage services like teleports, direct-to-home and mobile TV.

In a significant reform move, the government allowed 100 per cent FDI in airlines and relaxed norms for overseas investments in brownfield airports.

In private security agencies, FDI limit was raised to 74 per cent from 49 per cent earlier.

In single-brand retail trading, the government said the mandatory local sourcing norm for foreign firms “will not be applicable up to three years from commencement of the business i.e opening of the first store for entities undertaking single brand retail trading of products have ‘state of art’ and ’cutting edge’ technology and where local souring is not possible“.

After completion of the exemption period, the foreign company in the next five years will have to meet the domestic sourcing norm at an annualised average rate of 30 per cent.

Thereafter, they have to comply with the norm on an annual basis.

The DIPP also notified the changes in pharmaceuticals, in which government has allowed FDI upto 74 per cent through automatic route and beyond that under government approval. The government has also relaxed the norms in animal husbandry sector. FDI into the country grew by 29 per cent to $40 billion in 2015-16.

Top News Today

Sign in to unlock member-only benefits!
  • Access 10 free stories every month
  • Save stories to read later
  • Access to comment on every story
  • Sign-up/manage your newsletter subscriptions with a single click
  • Get notified by email for early access to discounts & offers on our products
Sign in

Comments

Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.