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FDI Policy of Government of India

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FDI Policy of Government of India

 

Government of India has taken various effective steps to simplify the Foreign Direct investment policy. The Foreign Direct Investment Policy (FDI Policy) of the Government of India prescribes the foreign investment cap in specified industrial sectors. But in the recent times many activities have been transferred to unrestricted sectors in which 100% Foreign Direct investment is permitted. Broadly, the industrial sectors are categorized as:

  1. Restricted
  2. Prohibited
  3. Unrestricted Sectors (Up to 100% foreign ownership)

All the sectors other than those mentioned below subject to terms and conditions in the FDI policy come under unrestricted sectors for example:

  • Mining (except Mining and mineral separation of titanium bearing minerals and ores, its value addition and integrated activities)
  • Manufacturing related commercial activities
  • Information Technology related activities
  • E-commerce (permitted in marketplace model and not the inventory based model. Also, it applies only to Business to Business e-commerce and not business to consumer e-commerce)
Sector Entry Route
Upto 20% foreign ownership
Banking- Public Sector (Subject to Banking Companies (Acquisition & Transfer of Undertakings) Acts 1970/80) Government permission necessary
Upto 26% foreign ownership
Broadcasting Content Service (Terrestrial Broadcasting FM(FM Radio) and Up-linking of ‘News & Current Affairs’ TV Government permission necessary
Channels (Other conditions specified by Ministry of Information and Broadcasting, Government of India )) Government permission necessary
Print Media (Publishing of newspaper and periodicals dealing with news and current affairs and Publication of Indian editions of foreign magazines dealing with news and current affairs) Government permission necessary
Up to 49% foreign ownership
Defense Industry (subject to Industrial License under the Industries (Development & Regulation) Act, 1951) and other regulations Automatic up to 49% and above 49% under Government route with approval of Cabinet Committee on Security for state of the art technology
Cable Networks (Other Multi System Operators not undertaking upgradation of networks towards
digitalization and addressability and Local Cable Operators)		 Automatic
Petroleum and Natural Gas (Petroleum refining by the Public Cabinet Committee Sector Undertakings (PSU), without any disinvestment or dilution of domestic equity in the existing PSUs.) Automatic route
Scheduled Air Transport Service/ Domestic Scheduled Passenger Airline Automatic route
Insurance Automatic route
Private Security Agencies Automatic route
Telecom & related Services (including Telecom Infrastructure Providers Category-I) All telecom
services including Telecom Infrastructure Providers Category-I, viz. Basic, Cellular, United Access Services, Unified License (Access Services), Unified License, National/International Long Distance, Commercial V-Sat, Public Mobile Radio Trunked Services		 Automatic up to 49% and Government route beyond 49% and up to 100%.
Commodity Exchange Automatic route
Single Brand product retail trading Automatic up to 49% and Government route beyond 49%
Asset Reconstruction Company Automatic up to 49% and Government route beyond 49%
Pension Sector Automatic route
Power Exchanges (Power Exchanges registered under the Central Electricity Regulatory Commission (Power Market) Regulations, 2010.) Automatic route
Infrastructure Company in the Securities Market (namely, stock exchanges, depositories and clearing corporations, in compliance with SEBI Regulations) Automatic route
Upto 51% foreign ownership
Multi Brand Retail Trading Government
Upto 74% foreign ownership
Credit Information Companies Automatic
route
Civil Aviation (Ground Handling Services subject to sectoral regulations and security clearance) Automatic up to 49% and Government route beyond 49% and up to 74%
Airports (Existing projects) Automatic up to 74% and Government route beyond 74%
Satellites (Establishment and operation, subject to the sectoral guidelines of Department of Space/ISRO) Government
Banking & Finance - Private Sector Automatic up to 49% and Government route beyond 49% and up to 74%.

 

  • Lottery Business including Government/private lottery, online lotteries etc.
  • Gambling and Betting including casinos etc.
  • Chit funds
  • Nidhi company
  • Trading in Transferable Development Rights (TDRs)
  • Real Estate Business or Construction of Farm Houses
  • Manufacturing of cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes
  • Activities/sectors not open to private sector investment are Atomic Energy and Railway Operations