Revision in FDI Regulations
LOK SABHA
Government has put in place a liberal and investor-friendly policy on
Foreign Direct Investment (FDI) under which FDI up to 100% is permitted on the
automatic route in most sectors / activities. The UNCTAD’s
World Investment Reports for 2007 and 2008 have rated
The policy on FDI is reviewed on a continuing basis through inter-ministerial
consultations. A statement giving the extant FDI policy on sensitive sectors
viz., Defence, Aviation, Print Media and Telecom is as below:
1.
Defence Production:
FDI up to 26%, under the FIPB route,
is allowed for Defence Production subject to licensing under Industries
(Development & Regulation) Act, 1951 and guidelines on FDI in production of
arms & ammunition.
2.
FDI Policy for Air Transport Services Sector:
Government has allowed the following:
No foreign airlines would be allowed
to participate directly or indirectly in the equity of an Air Service
Undertaking;
FDI up to 49% and investment by
Non-resident Indians (
FDI up to 74% and investment by
Non-resident Indians (
FDI up to 74% and investment by
FDI up to 100% will be allowed on
the automatic route in Maintenance and Repair organizations; flying training
institutes; technical training institutions; and helicopter services/seaplane
services.
3.
Telecommunications
|
Sector |
Equity Cap |
Entry route |
Other
Conditions |
a) |
Basic and cellular, Unified
Access Services, National/
International Long Distance, V-Sat, Public
Mobile Radio Trunked
Services (PMRTS), Global Mobile Personal
Communications
Services (GMPCS)
and other value
added telecom services |
74% (Including FDI, FCCBs, ADRs, GDRs, convertible Preference shares,
and proportion- nate foreign equity
in Indian promoters/ Investing Company) |
Automatic up to 49%. FIPB beyond 49%. |
Subject
to guidelines notified in the PN
3(2007) |
b) |
|
74% |
Automatic up to 49%. FIPB beyond 49%. |
Subject to
licensing and security requirements notified by the Dept. of
Telecommunications. |
c) |
(a) (b)
infrastructure provider
providing dark fibre, right of way, duct space, tower (Category I); (c) electronic mail and voice mail. |
100% |
Automatic up
to 49%. FIPB beyond 49%. |
Subject to
the condition that such companies shall divest 26% of their equity in favour
of Indian public in 5 years, if these companies are listed in other parts of
the world. Also subject to licensing and security requirements, where
required. |
d) |
Manufacture
of telecom equipments |
100% |
Automatic |
Subject
to sectoral requirements. |
a. |
Publishing of newspaper and
periodicals dealing with news and current affairs |
26% |
FIPB |
Subject to Guidelines notified by
Ministry of Information & Broadcasting. |
b. |
Publishing of scientific
magazines/specialty journals/periodicals |
100% |
FIPB |
Subject to guidelines issued by
Ministry of Information & Broadcasting. |
c. |
Publishing of facsimile edition of
foreign newspapers. |
100% |
FIPB |
Subject to guidelines issued by
Ministry of Information & Broadcasting. Press Note 1 of 2009. |
d. |
Publication of Indian editions of
foreign magazines dealing with news & current affairs. |
26% (FDI & Investment by NRIs/PIOs/ |
FIPB |
Subject to guidelines issued by
Ministry of Information & Broadcasting. Press Note 1 of 2009. |