Published: Wed, January 10, 2018
Health | By Jay Jacobs

Govt relaxes FDI norms in airlines, retail, construction

Govt relaxes FDI norms in airlines, retail, construction

It has now been chose to permit 100 per cent FDI under automatic route for SBRT.

Earlier in the day, the Narendra Modi-led Cabinet declined the need for approval for FDI in Single Brand Retail Trading (SBRT).

The CPI-M on Wednesday denounced the government decision to allow 100 per cent FDI through the automatic route in single brand retail trade, warning this will have "harmful consequences" for domestic retail traders and shopkeepers.

Cabinet has also approved investment up to 49 per cent under approval route In Air India to facilitate Air India divestment. However, this provision was presently not applicable to Air India, thereby implying that foreign airlines could not invest in Air India.

In Air India, it will now allow a maximum of 49 percent foreign ownership including that by airlines.

This condition was relaxed subject to certain conditions.

Extant FDI policy on SBRT allows 49 percent FDI under automatic route, and FDI beyond this, up to 100 percent through government approval route. It has now been made a decision to permit 100% FDI under automatic route for SBRT.

In addition to this, the government has also chose to allow foreign institution investors and portfolio investors to invest in power exchanges through primary market.

The approval through automatic route is aimed at further quickening the FDI clearance process and many foreign players may now enter the Indian market this advantage of this. However, it added the policy had so far restricted FII/FPI purchases restricted to secondary market only.

These measures taken by the Government have resulted in increased FDI inflows into the country.

The Cabinet also chose to allow 100 per cent FDI in construction development relating to building townships, housing, infrastructure and real estate broking services. Government has put in place an investor friendly policy on FDI, under which FDI up to 100%, is permitted on the automatic route in most sectors/ activities.

Total FDI inflows received in 2014-15 were $45.15 billion as against $36.05 billion in 2013-14.

During 2015-16, India received total FDI of $55.46 billion.

In the financial year 2016-17, total FDI of USA $ 60.08 billion has been received, which is an all-time high, read the statement issued by the government.

"Cases under the government approval route, also requiring security clearance with respect to countries of concern, will continue to be processed by concerned administrative department or ministry". It has now been chose to permit 100% FDI under automatic route for SBRT.

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