FDI in single brand retail allowed to 100%

To send a signal of its reformist nature, the Union Cabinet headed by the Prime Minister Shri Narendra Modi, on January 10, 2018 gave its approval to further opening of some sectors through FDI.

 

1. Single Brand Retail Trading (SBRT): 100% FDI under automatic route allowed. Earlier it was 49%. Single brand retail trading entity to set off its incremental sourcing of goods from India for global operations during initial 5 years, beginning 1^stApril of the year of the opening of first store against the mandatory sourcing requirement of 30% of purchases from India.
2. Civil Aviation: Foreign airlines are allowed now to invest up to 49% under approval route in Air India. However, substantial ownership and effective control of Air India shall continue to be vested in Indian National.
3. Construction Development: Real-estate broking services is eligible for 100% FDI under automatic route.
4. Power Exchanges: FIIs/FPIs allowed to invest in Power Exchanges (uupto 49%) through primary market.
5. Pharmaceuticals: Definition has been amended. The reference to Drugs and Cosmetics Act has been dropped from FDI policy. Tt has also been decided to amend the definition of ‘medical devices’ as contained in the FDI Policy.

What are the Objectives: These policy measures are intended to liberalise and simplify the FDI policy so as to provide ease of doing business in the country. Consequently, it will attract larger FDI inflows contributing to growth of investment, income and employment. Foreign Direct Investment (FDI) is a major driver of economic growth and a source of non-debt finance for the economic development of the country. 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.

-The government’s recent measures have resulted in increased FDI inflows in to the country. As per the data released by the government, during the year 2014-15, total FDI inflows received were US $ 45.15 billion as against US $ 36.05 billion in 2013-14. During 2015-16, country received total FDI of US $ 55.46 billion. Surprisingly, financial year 2016-17 attracted total FDI of US $ 60.08 billion, which is an all-time high.

-Seeing the potential to attract far more foreign investment which can be achieved by further liberalizing and simplifying the FDI regime. Accordingly, the Government has decided to introduce a number of amendments in the FDI Policy.