Friday, January 19, 2018

FDI Policy Further Liberalized in Key Sectors

FDI policy further liberalized in key sectors || Cabinet approves amendments in FDI policy


►100% FDI under automatic route for Single Brand Retail Trading
►100% FDI under automatic route in Construction Development
►Foreign airlines allowed to invest up to 49% under approval route in Air India
►FIIs/FPIs allowed to invest in Power Exchanges through primary market
►Definition of ‘medical devices’ amended in the FDI Policy

Government approval no longer required for FDI in Single Brand Retail Trading (SBRT)

Extant FDI policy on SBRT allows 49% FDI under automatic route, and FDI beyond 49% and up to 100% through Government approval route. It has now been decided to permit 100% FDI under automatic route for SBRT.

It has been decided to permit single brand retail trading entity to set off its incremental sourcing of goods from India for global operations during initial 5 years, beginning 1st April of the year of the opening of first store against the mandatory sourcing requirement of 30% of purchases from India.

A non-resident entity or entities, whether owner of the brand or otherwise, is permitted to undertake ‘single brand’ product retail trading in the country for the specific brand, either directly by the brand owner or through a legally tenable agreement executed between the Indian entity undertaking single brand retail trading and the brand owner.

Civil Aviation
As per the extant policy, foreign airlines are allowed to invest under Government approval route in the capital of Indian companies operating scheduled and non-scheduled air transport services, up to the limit of 49% of their paid-up capital.

Construction Development
It has been decided to clarify that real-estate broking service does not amount to real estate business and is therefore, eligible for 100% FDI under automatic route.

Power Exchanges
Extant policy provides for 49% FDI under automatic route in Power Exchanges registered under the Central Electricity Regulatory Commission (Power Market) Regulations, 2010. However, FII/FPI purchases were restricted to secondary market only. It has now been decided to do away with this provision, thereby allowing FIIs/FPIs to invest in Power Exchanges through primary market as well.

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