On 10 November 2015, the Indian Department of Industrial Policy & Promotion liberalised FDI conditions in several sectors as summarised below.
- The limit for approvals forForeign Investment Promotion Board (FIPB) has been increased to INR 5000 crore (~USD 752 millions) in order to allow for faster decisions. Earlier, FDI proposals up to INR 3000 crore (~USD 451 million) weredecided by the FIPB and proposalsbeyond this limit were forwarded to the Cabinet Committee on EconomicAffairs.
- Coditions for FDI have been relaxed for agriculture, animal husbandry as well as mining and mineral separation of titanium bearing minerals and ores.
- Investment by way of transfer of shares will not require a government approval provided the investment is within the sectoral limit for the automatic route.
- FDI is now allowed up to an ownership ceiling of 49% under the automatic route. Earlier, all FDI was restricted to the government approval route.
- Proposals beyond 49% foreign ownership will be cleared by the FIPB and not by the Cabinet Committee on Security.
- Limits for foreign portfolio and venture capital investments have been increased from 24% to 49% under the automatic route.
- The requirement to invest USD 5 million in 6 months for an approval has been removed.
- The restriction of total floor area under construction to not exceed 20,000 sq. meters has been removed.
- Each phase of the construction project will be considered as a separate project for the purpose of the FDI policy.
- Foreign investors can now exit and repatriate income before project completion provided the 3 years lock-in period is met.
- The FDI limit in cable network, DTH, mobile TV, Teleports and Headend-in-the Sky Broadcasting Service is increased from 74% to 100%.
- Limit for FM radio and "uplinking of news & current affairs TV channels" is increased from 26% to 49%. Furthermore, 100% FDI is allowed for investments in "up-linking and downlinking of non-news & current affairs TV channels".
- Manufacturers are now permitted to sell through wholesale and/or retail, including e-commerice without government approval
Single Brand Retail Trading
- The condition to source at least 30% of value of goods locally for Single Brand Retail Traders can now be relaxed by the government in cases of state-of-art technologies
- Single Brand Retail Traders are now also allowed to engage in e-commerce
- Certain conditions under the FDI policy for such trading have been relaxed for FDI in Indian brands
SBRT and Wholesale/cash & carry
- Earlier, the FDI policy did not permit a wholesale/cash & carry trader to sell through retail shops. This condition has been relaxed and the entity can undertake both SBRT and wholesale activities provided the FDI conditions for both businesses are met separately
- The sub-limits for foreign direct and indirect investments (totaling 49%) have been removed for investments in private sector banks and a composite cap of 74% has been introduced allowing FIIs, FPIs and QFIs to invest.
- FDI in Plantation of Coffee, rubber, cardamom, plam oil and olive oil are now allowed up to 100% under the automatic route
- Earlier investments by Non-Resident Indians (NRIs) were treated on par with domestic investment. This treatment has been extended to foreign companies, trust or firms owned by NRIs
- FDI is now allowed up to 100% under the automatic route
- FDI is now permitted under the automatic route up to 49% in Regional Air Transport Service
- FDI limit for non-scheduled air transport service, ground handing services, satellites-establishment and operation and Credit Information Companies increased from 74% to 100%. Further sectors other than Satellites-establishment and operation have been allowed FDI under the automatic route.
Limited Liability Partnerships
- FDI of 100% allowed now under the automatic route instead of the government route. Further there are no FDI-linked performance conditions.
Under the government route, prior approval is required from the government for foreign investments while no such approval is required for sectors open under the "automatic route", provided sector specific conditions such as no change in ownership are met.
*USD to INR rate as on 12 November 2015 at INR 66.43/USD.