Govt announces major FDI related reforms

New Delhi

The Government has brought in FDI related Reforms and liberalisation touching upon 15 major Sectors of the Economy.

The salient measures are:

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

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

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

iv. Agriculture and Animal Husbandry

v. Plantation

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

vii. Defence

viii. Broadcasting Sector

ix. Civil Aviation

x. Increase of sectoral cap

xi. Construction development sector

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

xiii. Single Brand Retail Trading and Duty free shops

xiv. Banking-Private Sector; and

xv. Manufacturing Sector

The Crux of these reforms is to further ease, rationalise and simplify the process of foreign investments in the country and to put more and more FDI proposals on automatic route instead of Government route where time and energy of the investors is wasted.

Further refining of foreign investments in key Sectors like Construction where 50 million houses for poor are to be built.

Opening up the manufacturing Sector for wholesale, retail and E-Commerce so that the Industries are motivated to Make In India and sell it to the customers here instead of importing from other countries.

The proposed reforms also enhance the limit of Foreign Investment Promotion Board (FIPB) from current Rupees Three thousand crores to Five thousand crores.

The proposal also contains many other long pending corrections including those being felt by the limited liability partnerships as well as NRI owned Companies who seem motivated to invest in India.

Few other proposals seek to enhance the sectoral Caps so that foreign investors don’t have to face fragmented ownership issues and get motivated to deploy their resources and technology with full force.

Along with these sectoral reforms, DIPP has also been advised to consolidate all FDI related instructions contained in various notifications & press notes and prepare a booklet so that the investors don’t have to refer to several documents of different timeframes.

This exercise of PM, Shri Narendra Modi is intended on the one hand to further open up the Sectors for more foreign investments in the country and also to make it easy to invest in India.

In the normal course, the Policy corrections in 16 areas would have taken at least one year to process and get approvals.

Inputs from PIB