IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
← back to the state act
Inception date: 24 Jun 2016 | Removal date: open ended
Still in force

FDI: Entry and ownership rule

On 24 June 2016, the Indian Department of Industrial Policy and Promotion published the Press Note No. 5 (2016 series) amending and liberalising the FDI policy in several sectors, as summarised below - 
 

  1. The requirement to get an approval from the Reserve Bank of India or a separate security clearance has been removed for establishing a branch, liasion or project office or any other place of business in India if the principal business of the applicant is Defence, Telecom, Private Security or Information & Broadcasting and an approval from the Foreign Investment Promotion Board(FIPB) or an approval from the concerned Ministry has already been granted.
  2. Earlier 100% FDI under Automatic route in Animal Husbandry, Pisciculture, Aquaculture, and Apiculture was allowed for projects under controlled conditions. This condition has now been removed.
  3. Local sourcing norms have been relaxed for 3 years with an extension of 5 years with reduced relaxation for companies undertaking Single Brand Retail Trading of products with state of art or cutting edge technology.
  4. FDI limit in establishing Private Security agencies has been allowed under the automatic route upto 49%, a limit which earlier required government approval, while the limit under the approval route has been increased to 74%
  5. FDI limit for Brownfiled Airport projects under the automatic route has been increased from 74% to 100%
  6. FDI limit in Scheduled Air Transport Service/Domestic Scheduled Passenger Airline and regional Air Transport service has been increased from 49% to 100%, with investments up to 49% allowed under the automatic route and over 49% under the approval route
  7. FDI has been allowed under the automatic route, up to 74%, in the pharmaceutical sector. Investments up to 100% are allowed under the goverment route
  8. 100% FDI under government route has been allowed for trading, including through ecommerce, in food products manufactured or produced in India
  9. FDI limit in the defense sector above 49% earlier required access to "State-of-art" technology. This requirement has been done away with.
  10. Further, FDI limit applicable to the defense sector has been extended to Manufacturing of Small Arms and Ammunitions covered under the Arms Act 1959.
  11. FDI investments in Broadcasting services have been allowed up to 100% under the automatic route as opposed to the earlier policy that allowed 49% under the automatic route. Investments beyond 49% that lead to changes in ownership patterns or transfer of stake to foreign investors will require government approval.

 

AFFECTED COUNTRIES

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