PM Modi's big-ticket FDI reforms

Unveiling sweeping liberalisation of foreign investment norms, the government in November opened up 15 sectors including real estate, defence, civil aviation and news broadcasting in a bid to push up reforms days after BJP's debacle in Bihar and ahead of the Prime Minister's UK visit.

While restrictions in the construction sector were freed up by allowing overseas investors to exit and repatriate investment even before project completion, foreign direct investment (FDI) up to 49 percent stake in defence firms and regional airlines has been allowed without government nod.

Also Read: PM Modi's reform push: Govt announces sweeping relaxation of FDI norms in 15 sectors

As part of the reform exercise, the government has allowed 100 percent FDI in cable and direct-to-home TV operators, duty free shops and investment through automatic route in limited liability partnerships.

It also permitted portfolio investors to buy up to 74 percent in local private banks, with full fungibility, while palm, coffee and rubber plantations have been opened up for the first time.

Rules for sourcing for single brand retailers particularly for high-tech have been eased by allowing them to sell online without specific permissions. But there is no change in 51 percent limit for retailers like Wal-Mart in multi-brand retailing.

Also Read: Easier FDI norms to boost economic growth, employment: Nirmala Sitharaman

The government also raised financial power of the Foreign Investment Promotion Board (FIPB) to give single window clearance for investment projects of up to Rs 5,000 crore from Rs 3,000 crore currently.

To further boost entire investment environment and to bring in foreign investments in the country, the government has brought in FDI related Reforms and liberalisation touching upon 15 major Sectors of the Economy. The salient measures are:

1. Limited Liability Partnerships, downstream investment and approval conditions.

2. Investment by companies owned and controlled by Non-Resident Indians (NRIs)

3. Establishment and transfer of ownership and control of Indian companies

4. Agriculture and Animal Husbandry

5. Plantation

6. Mining and mineral separation of titanium bearing minerals and ores, its value addition and integrated activities

7. Defence

8. Broadcasting Sector

9. Civil Aviation

10. Increase of sectoral cap

11. Construction development sector

12. Cash and Carry Wholesale Trading / Wholesale Trading (including sourcing from MSEs)

13. Single Brand Retail Trading and Duty free shops

14. Banking-Private Sector; and

15. Manufacturing Sector