| THE Union Cabinet yesterday approved the
proposal for review of Foreign Direct Investment (FDI) caps and routes
in various sectors.
The Government has decided to amend the provisions relating to the FDI caps and routes in various sectors as under:
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1. Petroleum & Natural Gas
(Petroleum
refining by the Public Sector Undertakings (PSU), without any
disinvestment or dilution of domestic equity in the existing PSUs .) (
para 6.2.4.2)
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FDI ceiling
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Route
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(a) Existing
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49%
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Government
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(b) Proposed
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49%
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Automatic
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2. Commodity exchanges ( para 6.2. 17.4)
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(a) Existing
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49%(26%FDI+23%FII)
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Government
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(b) Proposed
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49%(26%FDI+23%FII)
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Automatic #
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3. Power exchanges ( para 6.2.19)
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(a) Existing
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49%(26%FDI+23%FII)
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Government
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(b) Proposed
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49%(26%FDI+23%FII)
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Automatic
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4. Stock exchanges, depositories and clearing corporations ( para 6.2.17.6.1)
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(a) Existing
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49%(26%FDI+23%FII)
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Government
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(b) Proposed
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49%(26%FDI+23%FII)
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Automatic
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5. Asset Reconstruction Company ( para 6.2.17.1)
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(a) Existing
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74%(FDI + Fll )
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Government :
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(b) Proposed
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100%(FDI+FII)
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Up to 49% Automatic 49% to 100% Government
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6. Credit Information Companies ( CICs ) ( para 6.2.17.5)
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(a) Existing
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49% (FDI+FII)
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Government
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(b) Proposed
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74%(FDI+FII)
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Automatic
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7. Tea sector including tea plantations ( para 6.2.2.1)
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(a) Existing
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100% (divestment of 26% to Indian partner within 5 years)
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Government
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(b) Proposed
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100%
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Government
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8. Single-brand product retail trading ( para 6.2.1 6.4)
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(a) Existing
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100%
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Government
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(b) Proposed
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100%
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Up to 49% Automatic 49% to 100% Government ##
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# Subject to guidelines issued by Department of Consumer Affairs/FMC.
##
Existing paragraphs 6.2.16.4 (2) (d) and 6.2.16.4 (3) of `Circular 1 of
2013- Consolidated FDI Policy` will be replaced with following
paragraphs:
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Existing pargraphs
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Proposed paragraphs
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6.2.16.4 (2) (d)
Only
one non-resident entity, whether owner of the brand or otherwise, shall
be permitted to undertake single brand product retail trading in the
country, for the specific brand, through a legally tenable agreement,
with the brand owner for undertaking single brand product retail trading
in respect of the specific brand for which approval is being sought.
The onus for ensuring compliance with this condition shall rest with the
Indian entity carrying out single-brand product retail trading in
India. The investing entity shall provide evidence to this effect at the
time of seeking approval, including a copy of the licensing/
franchise/sub- licence agreement, specifically indicating compliance
with the above condition.
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6.2.16.4 (2) (d)
A
non-resident entity or entities, whether owner of the brand or
otherwise shall be permitted to undertake `Single Brand` product retail
trading in the country for the specific brand, directly or through a
legally tenable agreement with the brand owner for undertaking single
brand product retail trading. The
onus for ensuring compliance with
this condition will rest with the Indian
entity carrying out single brand
product retail trading in India. The
investing entity shall provide evidence
to this effect at the time of seeking
approval, including a copy of the
licensing/ franchise/sub-license
agreement, specifically indicating
compliance with the above condition.
The requisite evidence should be filed
with the RBI for the automatic route
and SIA/FIPB for cases involving
approval.
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6.2.16.4
(3) Application seeking permission of the Government for FDI in retail
trade of "Single Brand" products would be made to the Secretariat for
Industrial Assistance (SIA) in the Department of Industrial Policy &
Promotion. The applications would specifically indicate the product/
product categories which are proposed to be sold under a "Single Brand".
Any additional to the product/ product categories to be sold under
Single Brand" would require a fresh approval of the Government.
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6.2.16.4
(3) Application seeking permission of the Government for FDI exceeding
49% in a company which proposes to undertake single brand retail trading
in India would be made to the Secretariat for Industrial Assistance
(SIA) in the Department of Industrial Policy and Promotion. The
applications would specifically indicate the product/ product categories
which are proposed to be sold under a "Single Brand". Any addition to
the product/ product categories to be sold under "Single Brand" would
require a fresh approval of the Government. In case of FDI up to 49% the
product/ product categories proposed to be sold except food products
would be provided to the RBI.
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9. Test Marketing ( para 6.2.16.3)
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(a) Existing
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100%.
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Government
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(b) Proposed
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Para to be deleted.
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10. Telecom Services ( including Telecom Infrastructure Providers Category-l)
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 (PMRTS), Global
Mobile Personal Communications Services (GMPCS), All types of ISP
licences , Voice Mail/ Audiotex /UMS, Resale of IPLC, Mobile Number
Portability services, Infrastructure Provider Category-l (providing dark
fibre , right of way, duct space, tower) except Other Service
Providers.
( para 6.2.15.1, 6.2.15.2 and 6.2.15.3)
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(a) Existing
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74%.
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Up to 49% Automatic 49% to 74% Government
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(b) Proposed
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100%
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Up to 49% Automatic 49% to 100% Government@
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11. Courier Services ( para 6.2.10)
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(a) Existing
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100%
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Government
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(b) Proposed
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100%
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Automatic
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12. Defence ( para 6.2.6)
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(a) Existing
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26%
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Government
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(b) Proposed
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26%-No change USD
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Up to 26%, no change i.e., through FIPB and CCEA if FDI exceeds Rs . 1200 crore .
Above 26% to CCS on case to case basis, which ensure access to modern and `state-of-art` technology in the country.
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@
FDI up to 100% with 49% under automatic route and beyond 49% through
FIPB route subject to observance of licensing and security conditions by
licensee as well as investors as notified by the Department of
Telecommunications ( DoT ) from time to time .
USD Fll through portfolio investment is not permitted.
In
the backdrop of the fairly modest FDI inflows over the last year and
lack of growth in gross domestic capital formation, FDI ceilings and
entry routes have been liberalized for the aforestated sectors with a
view to stimulating FDI inflows in to the country thereby contributing
to growth of investment, incomes and employment.
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