The Government of India (GoI) in a meeting held on 20th June, 2016, chaired by Prime Minister Narendra Modi, took radical steps to boost FDI in the Indian economy.
Since last 2 years the Government has brought major reforms in Defence sector, Construction Development, Insurance, Pension Sector, Broadcasting sector etc. To further simplify the FDI Policy the GoI has introduced the major reforms whereby most of the Sectors / Activities have been brought under automatic route of approval for investing in India.
Here is a synopsis of earlier limits of the FDI and the reforms introduced:
S. No. | Sector | FDI Limits PRIOR to notification dated 20th June, 2016 | FDI Limits POST notification dated 20th June, 2016 |
1. | Defence Sector | Upto 49% – Automatic Route
Beyond 49% – Cabinet Committee on Security on case to case basis. |
Upto 49% – Automatic Route
Beyond 49% till 100% – Government Approval on case to case basis. * Condition of access to ‘state of art’ technology has been done away with. ** FDI for defence has also been made applicable to Manufacturing of Small Arms and Ammunitions covered under Arms Act, 1959. |
2. | Broadcasting Carriage Services
|
Upto 49% – Automatic Route
Beyond 49% upto 100% – Government Approval |
100% Automatic Route |
3. | Pharmaceutical – Brownfield Projects | 100% – Government approval | Upto 74% – Automatic Route
Beyond 74% upto 100% – Government Approval |
4. | Civil Aviation – Brownfield Airport Projects | Upto 74% – Automatic Route
Beyond 74% upto 100% – Government Approval |
100% – Automatic Route |
5. | Civil Aviation – Scheduled Air Transport Service / Domestic Scheduled Passenger Airline and Regional Air Transport Service. | Upto 49% – Automatic Route | Upto 49% – Automatic Route
Beyond 49% upto 100% – Government Approval * Foreign airlines can invest up to the limit of 49% of their paid up capital and subject to the conditions laid down in the existing FDI policy. |
6. | Private Security Agencies | 49% – Government Approval | Upto 49% – Automatic Route
Beyond 49% upto 74% – Government Approval |
7. | Animal Husbandry | 100% – Automatic Route but provided the activity is done under “Controlled Conditions” | Requirement of “Controlled Conditions” has been done away with. |
8. | Single Brand Retail Trading (SBRT) | Upto 49% – Automatic Route
Beyond 49% upto 100% – Government Approval |
Upto 49% – Automatic Route
Beyond 49% upto 100% – Government Approval * following conditions have been relaxed:
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The radical changes in the FDI policy have been brought in by the GoI to attract inflow of Foreign Exchange in the Indian market and for creation of employment and job opportunities in India.
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