PM Modi's reform push: Govt announces sweeping relaxation of FDI norms in 15 sectors

Zee Media Bureau

New Delhi: After facing humiliating defeat in the Bihar assembly elections, Narendra Modi government on Tuesday allowed FDI through automatic route in 15 sectors including the construction, civil aviation, banking, defence, retail and news broadcasting.

While 100 percent foreign direct investment (FDI) has been allowed in DTH, cable network and plantation crop, overseas investment limit in uplinking of news and current affairs TV channels has been raised to 49 percent from 26 percent, Finance Minister Arun Jaitley said.

The government relaxed conditions for FDI in single-brand retail and allowed 100 percent FDI under automatic route in duty-free shops and Limited Liability Partnerships (LLP) and eased foreign investment norms in the defence sector.

It has also raised the FIPB's monetary limit to Rs 5,000 crore from Rs 3,000 crore for approving FDI proposals.

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In the construction development sector, minimum capitalisation norms and floor area restrictions have been removed. The government has also eased exit norms for foreign players in the sector.

In the private banking sector, the government has introduced full fungibility of foreign investment and accordingly, "FIIs/FPIs/QFIs, following due procedure, can now invest up to sectoral limit of 74 percent, provided there is no change of control and management of the investee company".

Earlier, portfolio investment was permitted up to 49 percent.

Below is the entire list of sectors which have undergone FDI reforms:

-Limited Liability Partnerships, downstream investment and approval conditions.

-Investment by companies owned and controlled by Non-Resident Indians (NRIs)

-Establishment and transfer of ownership and control of Indian companies

-Agriculture and Animal Husbandry

-Plantation

-Mining and mineral separation of titanium bearing minerals and ores, its value addition and integrated activities

-Defence

-Broadcasting Sector

-Civil Aviation

-Increase of sectoral cap

-Construction development sector

-Cash and Carry Wholesale Trading / Wholesale Trading (including sourcing from MSEs)

-Single Brand Retail Trading and Duty free shops

-Banking-Private Sector; and

-Manufacturing Sector

Talking to the media persons, FM said that the crux of these reforms is to further ease, rationalise and simplify the process of foreign investments in the country and to put more and more FDI proposals on automatic route instead of government route where time and energy of the investors is wasted.

India got foreign direct investment worth of USD 19.39 billion in the April-June quarter, according to government data, which is 29.5 percent more than that received in the same period last year.

The Modi government has been pushing hard to drum up overseas investment, easing FDI regulations in various sectors including the railways, medical devices, insurance, pension, construction and defence.

The Finance Minister also ruled out any impact of Bihar poll results on investor sentiment and said the economic reforms will continue.

"The poll impact won't deter investor confidence and sentiment... I think investors are very wise people, they will see the performance of this government," FM said.

"They will judge us by our working style and we will provide good governance."

"Many reforms are with executive decisions. Those will continue. Many legislative issues also get passed by Parliament. In some cases, there are delays, but those will be sorted out," he said.

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