TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All News
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All News
Join Channel
Note
Bookmark
Share
Don't have an account? Register Here
Cabinet Decision
The Union Cabinet today approved the proposal for review of Foreign Direct Investment (FDI) caps and routes in various sectors.
The Government has decided to amend the provisions relating to the FDI caps and routes in various sectors as under:
1. Petroleum & Natural Gas (Petroleum refining by the Public Sector Undertakings (PSU), without any disinvestment or dilution of domestic equity in the existing PSUs.) (para 6.2.4.2) | |||
| FDI ceiling
| Route
| |
(a) Existing
| 49%
| Government
| |
(b) Proposed
| 49%
| Automatic
| |
2. Commodity exchanges (para 6.2. 17.4) | |||
(a) Existing
| 49%(26%FDI+23%FII)
| Government
| |
(b) Proposed
| 49%(26%FDI+23%FII)
| Automatic #
| |
3. Power exchanges (para 6.2.19)
| |||
(a) Existing
| 49%(26%FDI+23%FII)
| Government
| |
(b) Proposed
| 49%(26%FDI+23%FII)
| Automatic
| |
4. Stock exchanges, depositories and clearing corporations (para 6.2.17.6.1) | |||
(a) Existing
| 49%(26%FDI+23%FII)
| Government
| |
(b) Proposed
| 49%(26%FDI+23%FII)
| Automatic
| |
5. Asset Reconstruction Company (para 6.2.17.1) | |||
(a) Existing
| 74%(FDI + Fll)
| Government :
| |
(b) Proposed
| 100%(FDI+FII)
| Up to 49% Automatic 49% to 100% Government
| |
6. Credit Information Companies (CICs) (para 6.2.17.5) | |||
(a) Existing
| 49% (FDI+FII)
| Government
| |
(b) Proposed
| 74%(FDI+FII)
| Automatic
| |
7. Tea sector including tea plantations (para 6.2.2.1) | |||
(a) Existing
| 100% (divestment of 26% to Indian partner within 5 years)
| Government
| |
(b) Proposed
| 100%
| Government
| |
8. Single-brand product retail trading (para 6.2.1 6.4)
| |||
(a) Existing
| 100%
| Government
| |
(b) Proposed
| 100%
| Up to 49% Automatic 49% to 100% Government ##
| |
# Subject to guidelines issued by Department of Consumer Affairs/FMC.
## Existing paragraphs 6.2.16.4 (2) (d) and 6.2.16.4 (3) of `Circular 1 of 2013-Consolidated FDI Policy` will be replaced with following paragraphs:
Existing pargraphs | Proposed paragraphs |
Only one non-resident entity, whether owner of the brand or otherwise, shall be permitted to undertake single brand product retail trading in the country, for the specific brand, through a legally tenable agreement, with the brand owner for undertaking single brand product retail trading in respect of the specific brand for which approval is being sought. The onus for ensuring compliance with this condition shall rest with the Indian entity carrying out single-brand product retail trading in India. The investing entity shall provide evidence to this effect at the time of seeking approval, including a copy of the licensing/ franchise/sub-licence agreement, specifically indicating compliance with the above condition.
| A non-resident entity or entities, whether owner of the brand or otherwise shall be permitted to undertake `Single Brand` product retail trading in the country for the specific brand, directly or through a legally tenable agreement with the brand owner for undertaking single
|
6.2.16.4 (3) Application seeking permission of the Government for FDI in retail trade of "Single Brand" products would be made to the Secretariat for Industrial Assistance (SIA) in the Department of Industrial Policy & Promotion. The applications would specifically indicate the product/ product categories which are proposed to be sold under a "Single Brand". Any additional to the product/ product categories to be sold under Single Brand" would require a fresh approval of the Government.
| 6.2.16.4 (3) Application seeking permission of the Government for FDI exceeding 49% in a company which proposes to undertake single brand retail trading in India would be made to the Secretariat for Industrial Assistance (SIA) in the Department of Industrial Policy and Promotion. The applications would specifically indicate the product/ product categories which are proposed to be sold under a "Single Brand". Any addition to the product/ product categories to be sold under "Single Brand" would require a fresh approval of the Government. In case of FDI up to 49% the product/ product categories proposed to be sold except food products would be provided to the RBI. |
9. Test Marketing (para 6.2.16.3) | ||
(a) Existing
| 100%.
| Government
|
(b) Proposed
| Para to be deleted.
| |
10. Telecom Services ( including Telecom Infrastructure Providers Category-l) All telecom services including Telecom Infrastructure Providers Category-I, viz. Basic, Cellular, United Access Services, Unified license (Access services), Unified License, National/ International Long Distance, Commercial V-Sat, Public Mobile Radio Trunked Services (PMRTS), Global Mobile Personal Communications Services (GMPCS), All types of ISP licences, Voice Mail/Audiotex/UMS, Resale of IPLC, Mobile Number Portability services, Infrastructure Provider Category-l (providing dark fibre, right of way, duct space, tower) except Other Service Providers. (para 6.2.15.1, 6.2.15.2 and 6.2.15.3) | ||
(a) Existing
| 74%.
| Up to 49% Automatic 49% to 74% Government
|
(b) Proposed
| 100%
| Up to 49% Automatic 49% to 100% Government@
|
11. Courier Services (para 6.2.10) | ||
(a) Existing
| 100%
| Government
|
(b) Proposed
| 100%
| Automatic
|
12. Defence (para 6.2.6) | ||
(a) Existing
| 26%
| Government
|
(b) Proposed
| 26%-No change $
| Up to 26%, no change i.e., through FIPB and CCEA if FDI exceeds Rs. 1200 crore. Above 26% to CCS on case to case basis, which ensure access to modern and `state-of-art` technology in the country.
|
@ FDI up to 100% with 49% under automatic route and beyond 49% through FIPB route subject to observance of licensing and security conditions by licensee as well as investors as notified by the Department of Telecommunications (DoT) from time to time.
$ Fll through portfolio investment is not permitted.
In the backdrop of the fairly modest FDI inflows over the last year and lack of growth in gross domestic capital formation, FDI ceilings and entry routes have been liberalized for the aforestated sectors with a view to stimulating FDI inflows in to the country thereby contributing to growth of investment, incomes and employment.
FDI liberalisation expands automatic and government routes across sectors, changing caps and approval requirements for strategic industries. The government revised sectoral FDI ceilings and entry routes, shifting several industries toward the automatic route while adjusting foreign equity limits. Notable changes include retention of 49% caps for exchanges and market infrastructure, raising asset reconstruction companies to 100% with automatic entry up to 49% and government approval beyond, increasing credit information companies to 74% automatic, permitting up to 100% FDI in telecoms with automatic entry up to 49%, amending single-brand retail clauses to allow multiple non-resident brand entities and prescribing filing requirements, deleting test marketing provisions, and maintaining defence caps with procedural safeguards. of Press 'Enter' after typing page number.
TaxTMI 
