TaxTMI 
TaxTMI 
Mapping of the sector specific FDI Policy in Consolidated FDI Policy 2014 in terms of National Industrial Classification (NIC)-2008
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....DI Policy 2014 with NIC-2008 is attached. (Shubhra Singh) Joint Secretary to the Government of India Dlo IPP File No.: No.7 /13/2012-IP dated: 5.01.2015 Copy forwarded to: 1. Press Information Officer, Press Information Bureau- for giving necessary publicity. 2. NICin the Department of Industrial Policy and Promotion- for uploading the Press Note on DIPP's website. 3. Hindi Division, DIPP for providing Hindi version. ============= Document 1 1. Prohibited Sectors: Sl. No. SECTORS 1. Department of Industrial Policy and Promotion Sector Specific Conditions on FDI POLICY NIC CODE-2008 Lottery Business including Government/private lottery, online Prohibited 92009 lotteries, etc. 2. Gambling and Betting including casinos etc. Prohibited 92009 3. Chit funds Prohibited 64990 4. Nidhi company Prohibited 64990 5. Trading in Transferable Development Rights (TDRs) Prohibited 66110 6. Real Estate Business or Construction of Farm Houses Prohibited 68200 7. Manufacturing of cigars, cheroots, cigarillos and cigarettes, of Prohibited tobacco or of tobacco substitutes 12001-12009 8. ....
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....e b) 01115-01119 c) 01411-01413, 01420, 01430, 01441-01443, 01450, 01461- 01463, 03111- 03113, 03211- 0321503219, 03221-03223, 03229 01611,01612, d) 01619, 01620 Notifications issued under Foreign Trade (Development and Regulation) Act, 1992. (iii) The company shall comply with any other Law, Regulation or Policy governing genetically modified material in force from time to time. (iv)Undertaking of business activities involving the use of genetically engineered cells and material shall be subject to the receipt of approvals from Genetic Engineering Approval Committee (GEAC) and Review Committee on Genetic Manipulation (RCGM). (v) Import of materials shall be in accordance with National Seeds Policy. II. The term "under controlled conditions" covers the following: (i) 'Cultivation under controlled conditions' for the categories of floriculture, horticulture, cultivation of vegetables and mushrooms is the practice of cultivation wherein rainfall, temperature, solar radiation, air humidity and culture medium are controlled artificially. Control in these parameters may be effected through protected c....
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.... subject to the provisions of Coal Mines (Nationalization) Act, 1973. Automatic 05101-05103, 05109, 05201- 05203, 0520 (2) Setting up coal processing plants like washeries subject to the 100% condition that the company shall not do coal mining and shall not sell washed coal or sized coal from its coal processing plants in the open market and shall supply the washed or sized coal to those parties who are supplying raw coal to coal processing plants for washing or sizing. Automatic 05103 6.2.3.3 Mining and mineral separation of titanium bearing minerals and ores, its value addition and integrated activities Mining and mineral separation of titanium bearing minerals & ores, its 100% Government 6.2.3.3.1 value addition and integrated activities subject to sectoral regulations and the Mines and Minerals (Development and Regulation Act 1957). 6.2.3.3.2 Other Conditions: 07210 India has large reserves of beach sand minerals in the coastal stretches around the country. Titanium bearing minerals viz. Ilmenite, rutile and leucoxene, and Zirconium bearing minerals including zircon are some of the beach sand minerals....
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....chnology transfer, the objective of the FDI Policy can be achieved, the conditions prescribed at (i) (A) above shall be deemed to be fulfilled. 6.2.4 6.2.4.1 6.2.4.2 6.2.5 6.2.5.1 Petroleum & Natural Gas Exploration activities of oil and natural gas fields, infrastructure related 100% to marketing of petroleum products and natural gas, marketing of natural gas and petroleum products, petroleum product pipelines, natural gas/pipelines, LNG Regasification infrastructure, market study and formulation and Petroleum refining in the private sector, subject to the existing sectoral policy and regulatory framework in the oil marketing sector and the policy of the Government on private participation in exploration of oil and the discovered fields of national oil companies. Petroleum refining by the Public Sector Undertakings (PSU), without 49% any disinvestment or dilution of domestic equity in the existing PSUs. Manufacturing Automatic 06101, 06201, 06102, 06202, 19201-19204, 19209, 09101- 09104, 19201- 19204, 19209, 49300 Automatic 19201-19204, 19209 Manufacture of items reserved fo....
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.... of the applicant company/partnership should be in Indian hands with majority representation on the Board as well as the Chief Executives of the company/partnership firm being resident Indians. (iv) Full particulars of the Directors and the Chief Executives should be furnished along with the applications. (v) The Government reserves the right to verify the antecedents of the foreign collaborators and domestic promoters including their financial standing and credentials in the world market. Preference would be given to original equipment manufacturers or design establishments, and companies having a good track record of past supplies to Armed Forces, Space and Atomic energy sections and having an established R & D base. (vi) There would be no minimum capitalization for the FDI. A proper assessment, however, needs to be done by the management of the applicant company depending upon the product and the technology. The licensing authority would satisfy itself about the adequacy of the net worth of the non-resident investor taking into account the category of weapons and equipment that are proposed to be manufactured. (vii) There would be a three-y....
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....d be subject to policy and guidelines as applicable to Ordnance Factories and Defence Public Sector Undertakings. Non-lethal items would be permitted for sale to persons/entities other than the Central of State Governments with the prior approval of the Ministry of Defence. Licensee would also need to institute a verifiable system of removal of all goods out of their factories. Violation of these provisions may lead to cancellation of the licence. (xv) All applications seeking permission of the Government for FDI in defence would be made to the Secretariat of Foreign Investment Promotion Board (FIPB) in the Department of Economic Affairs. (xvi) Applications for FDI up to 26% will follow the existing procedure with proposals involving inflows in excess of Rs. 1200 crore being approved by Cabinet Committee on Economic Affairs (CCEA). Applications seeking permission of the Government for FDI beyond 26%, will in all cases be examined additionally by the Department of Defence Production (DoDP) from the point of view particularly of access to modern and 'state-of-art' technology. (xvii) Based on the recommendation of the DoDP and FIPB, approval of t....
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....on and Broadcasting. The foreign investment (FI) limit in companies engaged in the aforestated activities shall include, in addition to FDI, investment by Foreign Institutional Investors (FIIs), Foreign Portfolio Investors (FPIs), Qualified Foreign Investors(QFIs), Non-Resident Indians (NRIs), Foreign Currency Convertible Bonds (FCCBs), American Depository Receipts (ADRs), Global Depository Receipts (GDRs) and convertible preference shares held by foreign entities. Foreign investment in the aforestated broadcasting carriage services will be subject to the following security conditions/terms: Mandatory Requirement for Key Executives of the Company (i) The majority of Directors on the Board of the Company shall be Indian citizens. (ii) The Chief Executive Officer (CEO), Chief Officer in-charge of technical network operations and Chief Security Officer should be resident Indian citizens. Security Clearance of Personnel (iii) The Company, all Directors on the Board of Directors and such key executives like Managing Director/Chief Executive Officer, Chief Financial Officer (CFO), Chief Security Officer (CSO), Chief Technical Officer (CT....
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....astructure/network diagram (technical details of the network) could be provided, on a need basis only, to equipment suppliers/manufactures and the affiliate of the licensee company. Clearance from the licensor would be required if such information is to be provided to anybody else. The Company shall not transfer the subscribers' databases to any person/place outside India unless permitted by relevant law. The Company must provide traceable identity of their subscribers. Monitoring, Inspection and Submission of Information (xi) (xii) (xiii) (xiv) (xv) (xvi) The Company should ensure that necessary provision (hardware/software) is available in their equipment for doing the lawful interception and monitoring from a centralized location as and when required by Government. The company, at its own costs, shall, on demand by the government or its authorized representative, provide the necessary equipment, services and facilities at designated place(s) for continuous monitoring or the broadcasting service by or under supervision of the Government or its authorized representative. The Government of India, Ministry of Information & Bro....
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....d/or render network security vulnerable. Other Conditions (xx) (xxi) Licensor reserves the right to modify these conditions or incorporate new conditions considered necessary in the interest of national security and public interest or for proper provision of broadcasting services. Licensee will ensure that broadcasting service installation carried out by it should not become a safety hazard and is not in contravention of any statute, rule or regulation and public policy. Print Media Publishing of newspaper and periodicals dealing with news and 26% (FDI and Government current affairs by 58131 investment NRIS/PIOS/FII/FPI) 6.2.8.2 Publication of Indian editions of foreign magazines dealing with news and current affairs investment 26% (FDI and Government by 58131 NRIS/PIOS/FII/FPI) 6.2.8.2.1 6.2.8.3 6.2.8.4 6.2.8.4.1 Other Conditions: (i) ‘Magazine', for the purpose of these guidelines, will be defined as a periodical publication, brought out on non- daily basis, containing public news or comments on public news. (ii) Foreign investment would also be subject to the Guidelines for Publica....
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....dertaking whose business includes the carriage by air of passengers or cargo for hire or reward; (v) "Aircraft component†means any part, the soundness and correct functioning of which, when fitted to an aircraft, is essential to the continued airworthiness or safety of the aircraft and includes any item of equipment; (vi) "Helicopter" means a heavier-than-air aircraft supported in flight by the reactions of the air on one or more power driven rotors on substantially vertical axis; (vii) "Scheduled air transport service" means an air transport service undertaken between the same two or more places and operated according to a published time table or with flights so regular or frequent that they constitute a recognizably systematic series, each flight being open to use by members of the public; 6.2.9.2 (viii) “Non-Scheduled air transport service" means any service which is not a scheduled air transport service and will include Cargo airlines; (ix)"Cargo airlines" would mean such airlines which meet the conditions as given in the Civil Aviation Requirements issued by the Ministry of Civil Aviation; (x) "Seaplane" means an aeropl....
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....ownership and effective control of which is vested in Indian nationals. (v) All foreign nationals likely to be associated with Indian scheduled and non-scheduled air transport services, as a result of such investment shall be cleared from security view point before deployment; and (vi) All technical equipment that might be imported into India as a result of such investment shall require clearance from the relevant authority in the Ministry of Civil Aviation. Note: (i) The FDI limits/entry routes, mentioned at paragraph 6.2.9.3 (1) and 6.2.9.3 (2) above, are applicable in the situation where there is no investment by foreign airlines. (i) The dispensation for NRIs regarding FDI up to 100% will also continue in respect of the investment regime specified at para 6.2.9.3.1(c)(ii) above. (ii) The policy mentioned at para 6.2.9.3.1 (c) above is not applicable to M/s Air India Limited. Other services under Civil Aviation sector 6.2.9.4 (1) Ground Handling Services subject to sectoral regulations and 74% FDI security clearance (100% for NRIs) Automatic up to 49% 52231, 52232, 52241, 52242, 52243 Government route beyond 49....
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....licable under prescribed regulations, have not been made available. It will be necessary that the investor provides this infrastructure and obtains the completion certificate from the concerned local body/service agency before he would be allowed to dispose of serviced housing plots. 6.2.12 6.2.12.1 (5) The project shall conform to the norms and standards, including land use requirements and provision of community amenities and common facilities, as laid down in the applicable building control regulations, bye- laws, rules, and other regulations of the State Government/Municipal/Local Body concerned. (6) The investor/investee company shall be responsible for obtaining all necessary approvals, including those of the building/layout plans, developing internal and peripheral areas and other infrastructure facilities, payment of development, external development and other charges and complying with all other requirements as prescribed under applicable rules/bye-laws/regulations of the State Government/ Municipal/Local Body concerned. (7) The State Government/Municipal/Local Body concerned, which approves the building/development plans, would monit....
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....d R&D on bio-technology, pharmaceutical sciences/life sciences, natural sciences and engineering; business and management consultancy activities; and architectural, engineering and other technical activities. FDI in Industrial Parks would not be subject to the conditionalities applicable for construction development projects etc. spelt out in para 6.2.11 above, provided the Industrial Parks meet with the under-mentioned conditions: (i) it would comprise of a minimum of 10 units and no single unit shall occupy more than 50% of the allocable area; (ii) the minimum percentage of the area to be allocated for industrial activity shall not be less than 66% of the total allocable area. 6.2.13 Satellites- establishment and operation 6.2.13.1 Satellites establishment and operation, subject to the sectoral 74% guidelines of Department of Space/ISRO Government 51202 6.2.14 Private Security Agencies 49 % Government 80100 6.2.15 Telecom Services 100% Automatic up to 61101-61104, 49% 61201, 61900 (including Telecom Infrastructure Providers Category-I) All telecom services including Telecom Infrastructure Provider....
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....s, only when WT are made to the following entities: (I) Entities holding sales tax/ VAT registration/service tax/excise duty registration; or (II) Entities holding trade licenses i.e. a license/registration certificate/membership certificate/registration under Shops and Establishment Act, issued by a Government (covered under the Division 46 of NIC- 2008 list relating to the specific product traded) to be (c) (d) (e) (f) Authority/Government Body/Local Self-Government Authority, reflecting that the entity/person holding the license/ registration certificate/ membership certificate, as the case may be, is itself/ himself/herself engaged in a business involving commercial activity; or (III) Entities holding permits/license etc. for undertaking retail trade (like tehbazari and similar license for hawkers) from Government Authorities/Local Self Government Bodies; or (IV) Institutions having certificate of incorporation or registration as a society or registration as public trust for their self consumption. Note: An entity, to whom WT is made, may fulfill any one of the 4 conditions. Full records indicating all t....
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.... compliance with this condition will 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. The requisite evidence should be filed with the RBI for the automatic route and SIA/FIPB for cases involving approval. (e) In respect of proposals involving FDI beyond 51%, sourcing of 30% of the value of goods purchased, will be done from India, preferably from MSMEs, village and cottage industries, artisans and craftsmen, in all sectors. The quantum of domestic sourcing will be self-certified by the company, to be subsequently checked, by statutory auditors, from the duly certified accounts which the company will be required to maintain. This procurement requirement would have to be met, in the first instance, as an average of five years' total value of the goods purchased, beginning 1st April of the year during which the first tranche of FDI is received. Thereafter, it would have to be met on an annual basis.....
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....etc. Expenditure on land cost and rentals, if any, will not be counted for purposes of backend infrastructure. Subsequent investment in backend infrastructure would be made by the MBRT retailer as needed, depending upon its business requirements. (iv) At least 30% of the value of procurement of manufactured/processed products purchased shall be sourced from Indian micro, small and medium industries, which have a total investment in plant & machinery not exceeding US $ 2.00 million. This valuation refers to the value at the time of installation, without providing for depreciation. The 'small industry' status would be reckoned only at the time of first engagement with the retailer, and such industry shall continue to qualify as a ‘small industry' for this purpose, even if it outgrows the (2) said investmentof US $ 2.00 million during the course of its relationship with the said retailer. Sourcing from agricultural co-operatives and farmers co-operatives would also be considered in this category. The procurement requirement would have to be met, in the first instance, as an average of five years' total value of the manufactured/processed produ....
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.... Andhra Pradesh 23 2. Assam 3. Delhi 4. Haryana 5. Himachal Pradesh 6. Jammu & Kashmir 7. Karnataka 8. Maharashtra 9. Manipur 10. Rajasthan 11. Uttarakhand 12. Daman & Diu and Dadra and Nagar Haveli (Union Territories) Financial Services 6.2.17 Financial Services Foreign investment in other financial services, other than those indicated below, would require prior approval of the Government: 6.2.17.1 Asset Reconstruction Companies 6.2.17.1. 1 'Asset Reconstruction Company' (ARC) means a company registered 100% of paid-up Automatic up to capital of ARC 49% with the Reserve Bank of India under Section 3 of the Securitisation (FDI+FII/FPI) 64990 Government route beyond 49% 6.2.17.1. 2 and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). Other Conditions: (i) Persons resident outside India can invest in the capital of Asset Reconstruction Companies (ARCs) registered with Reserve Bank, up to 49% on the automatic route, and beyond 49% on the Government route. (ii) No sponsor may hold more than 50% o....
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....ent of the total paid-up capital. (b) In the case of NRIs, as hitherto, individual holding is restricted to 5 per cent of the total paid-up capital both on repatriation and non-repatriation basis and aggregate limit cannot exceed 10 per cent of the total paid-up capital both on repatriation and non-repatriation basis. However, NRI holding can be allowed up to 24 per cent of the total paid-up capital both on repatriation and non-repatriation basis provided the banking company passes a special resolution to that effect in the General Body. (c) Applications for foreign direct investment in private banks having joint venture/subsidiary in insurance sector may be addressed to the Reserve Bank of India (RBI) for consideration in consultation with the 64191 Insurance Regulatory and Development Authority (IRDA) in order to ensure that the 26 per cent limit of foreign shareholding applicable for the insurance sector is not being breached. (d) Transfer of shares under FDI from residents to non-residents will continue to require approval of RBI and Government as per para 3.6.2 above as applicable. (e) The policies and procedures prescribed from time to t....
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....takings) Acts 1970/80. This ceiling (20%) is also applicable to the State Bank of India and its associate Banks. Portfolio Investment) Commodity Exchanges 6.2.17.4 6.2.17.4. 1 (1) Futures trading in commodities are regulated under the Forward Contracts (Regulation) Act, 1952. Commodity Exchanges, like Stock Exchanges, are infrastructure companies in the commodity futures market. With a view to infuse globally acceptable best practices, modern management skills and latest technology, it was decided to allow foreign investment in Commodity Exchanges. (2) For the purposes of this chapter, (i) "Commodity Exchange" is a recognized association under the provisions of the Forward Contracts (Regulation) Act, 1952, as amended from time to time, to provide exchange platform for trading in forward contracts in commodities. (ii) "recognized association†means an association to which recognition for the time being has been granted by the Central Government under Section 6 of the Forward Contracts (Regulation) Act, 1952 (iii) "Association†means any body of individuals, whether incorporated or not, constituted for the purposes ....
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....ructure Company in the Securities Market Infrastructure companies in Securities Markets, namely, stock exchanges, depositories and clearing corporations, in compliance with SEBI Regulations 49% (FDI + FII/FPI) [FDI limit of 26 per cent and FII/FPI limit of 23 per cent of Automatic 66110 6.2.17.6. Other Condition: 2 FII/FPI can invest only through purchases in the secondary market. 6.2.17.7 Insurance 6.2.17.7. 1 (i) Insurance Company (ii) Insurance Brokers (iii) Third Party Administrators (iv) Surveyors and Loss Assessors 6.2.17.7. Other Conditions: 2 the paid-up capital ] 26% Automatic (FDI+FII/FPI+NRI) 65110, 66220, 66210 65120, (1) FDI in the Insurance sector, as prescribed in the Insurance Act, 1938, is allowed under the automatic route. (2) This will be subject to the condition that Companies bringing in FDI shall obtain necessary license from the Insurance Regulatory & Development Authority for undertaking insurance activities. (3) The provisions of paragraphs 6.2.17.2.2(4)(i) (c) & (e), relating to ‘Banking-Private Sector', shall be applicable in respect of bank p....
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....ion to be brought upfront and the balance in 24 months. (iv) NBFCs (i) having foreign investment more than 75% and up to 100%, and (ii) with a minimum capitalisation of US $ 50 million, can set up step down subsidiaries for specific NBFC activities, without any restriction on the number of operating subsidiaries and without bringing in additional capital. The minimum capitalization condition as mandated by para 3.10.4.1, therefore, shall not apply to downstream 64990 Covered under the Division 66 of NIC- 2008 list relating to the activity. specific 6.2.18 subsidiaries. (v) Joint Venture operating NBFCs that have 75% or less than 75% foreign investment can also set up subsidiaries for undertaking other NBFC activities, subject to the subsidiaries also complying with the applicable minimum capitalisation norm mentioned in (i), (ii) and (iii) above and (vi) below. (vi) Non- Fund based activities: US $0.5 million to be brought upfront for all permitted non-fund based NBFCs irrespective of the level of foreign investment subject to the following condition: It would not be permissible for such a company to set up any subsidia....