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Government has put in place a liberal and investor-friendly policy on Foreign Direct Investment (FDI) under which FDI up to 100% is permitted on the automatic route in most sectors / activities. The UNCTAD's World Investment Reports for 2007 and 2008 have rated India as the second most attractive investment destination.
The policy on FDI is reviewed on a continuing basis through inter-ministerial consultations. A statement giving the extant FDI policy on sensitive sectors viz., Defence, Aviation, Print Media and Telecom is as below:
1. Defence Production:
FDI up to 26%, under the FIPB route, is allowed for Defence Production subject to licensing under Industries (Development & Regulation) Act, 1951 and guidelines on FDI in production of arms & ammunition.
2. FDI Policy for Air Transport Services Sector:
Government has allowed the following:
No foreign airlines would be allowed to participate directly or indirectly in the equity of an Air Service Undertaking;
FDI up to 49% and investment by Non-resident Indians (NRI) up to 100% will be allowed on the automatic route in Domestic Scheduled Passenger Airline Sector;
FDI up to 74% and investment by Non-resident Indians (NRI) up to 100% will be allowed on the automatic route in Non Scheduled airlines, Chartered airlines, and Cargo airlines;
FDI up to 74% and investment by NRI up to 100% will be allowed on the automatic route in Ground Handling Services; and
FDI up to 100% will be allowed on the automatic route in Maintenance and Repair organizations; flying training institutes; technical training institutions; and helicopter services/seaplane services.
3. Telecommunications
| Sector | Equity Cap | Entry route | Other Conditions |
a) | Basic and cellular, Unified Access Services, National/ International Long Distance, V-Sat, Public Mobile Radio Trunked Services (PMRTS), Global Mobile Personal Communications Services (GMPCS) and other value added telecom services | 74% (Including FDI, FII, NRI, FCCBs, ADRs, GDRs, convertible Preference shares, and proportion- nate foreign equity in Indian promoters/ Investing Company) | Automatic up to 49%.
FIPB beyond 49%. | Subject to guidelines notified in the PN 3(2007) |
b) | ISP with gateways, radio-paging, end-to-end bandwidth. | 74% | Automatic up to 49%. FIPB beyond 49%. | Subject to licensing and security requirements notified by the Dept. of Telecommunications. |
c) | (a) ISP without gateway, (b) infrastructure provider providing dark fibre, right of way, duct space, tower (Category I); (c) electronic mail and voice mail.
| 100% | Automatic up to 49%.
FIPB beyond 49%. | Subject to the condition that such companies shall divest 26% of their equity in favour of Indian public in 5 years, if these companies are listed in other parts of the world. Also subject to licensing and security requirements, where required. |
d) | Manufacture of telecom equipments | 100% | Automatic | Subject to sectoral requirements.
|
4. Print Media
a. | Publishing of newspaper and periodicals dealing with news and current affairs | 26% | FIPB | Subject to Guidelines notified by Ministry of Information & Broadcasting. www.mib.nic.in |
b. | Publishing of scientific magazines/specialty journals/periodicals | 100% | FIPB | Subject to guidelines issued by Ministry of Information & Broadcasting. www.mib.nic.in |
c. | Publishing of facsimile edition of foreign newspapers. | 100% | FIPB | Subject to guidelines issued by Ministry of Information & Broadcasting. Press Note 1 of 2009. |
d. | Publication of Indian editions of foreign magazines dealing with news & current affairs. | 26% (FDI & Investment by NRIs/PIOs/FII) | FIPB | Subject to guidelines issued by Ministry of Information & Broadcasting. Press Note 1 of 2009. |
This information was given by Shri Ashwani Kumar, Minister of State for Industry, in a written reply in the Lok Sabha today.
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