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Foreign Direct Investment
Policy India |
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FDI POLICY |
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India started taking strong initiatives
to open new sectors for Foreign Direct Investment (FDI) after year 2000
and since 2004 they have shown their promises time to time.
June 2004 onwards, India
has taken a strong initiative and further taken major steps to attract
the FDI in country. |
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FDI
in domestic airlines increased from 40% to 49%. Automatic route
allowed. |
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FDI up to 100%
allowed under the automatic route in development of townships,
housing, built up infrastructure and construction development
projects. |
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Foreign investment
limit in Telecom services increased to 74%. |
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FDI
and portfolio investment up to 20% allowed in FM Broadcasting.
Hitherto only Portfolio investment was allowed. |
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Transfer of shares allowed on automatic route in most cases. |
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Fresh
guidelines for investment with previous joint ventures. |
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A WTO
(TRIPs) IPR regime compliant in position since 2005 – Patents Act
amended to provide for product patent in Surat, and agro-chemicals
also. |
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Fresh guidelines on
FDI up to 100% allowed with prior approval of the government for up
linking a non news & current affairs TV channel has been notified in
press note 1 (2006 Series) |
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FDI up to 100%
allowed on the automatic route for integrated townships, housing,
construction development projects and built-up infrastructure
subject to minimum capitalisation and area development Press Note 2
(2006 Series). |
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Investment made by NRI in convertible currency made repatriable. |
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Foreign investment
including FDI, FII , ADR, GDR, proportionate equity in investing
companies up to 74% allowed Press Note 5 (2005 Series). |
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FDI and FII
investment of up to 20% allowed in FM Broadcasting. So far only 20%
portfolio investment was allowed. Press Note 6 (2005 Series). |
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Government soon has extended the policy in 2006 and has taken a step
forward
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FDI up to 100% allowed under the
‘Automatic Route’ in all activities except |
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Sectors attracting compulsory licensing |
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Transfer of shares to non-residents (foreign investors) In Financial Services, or Where the SEBI Takeovers Regulation is attracted |
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Investor having existing venture in same field
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Sector specific equity/route limit prescribed under sectoral policy |
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Investments made by foreign investors are given treatment similar to domestic investors |
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Very soon
retail sector will be developed & FDI inflow is
expected to come in the retail sector. |
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Main Sectors with FDI Equity / Route Limit
| FDI equity limit - Automatic route |
FDI requiring prior approval
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Insurance – 26% |
Defence production – 26% |
Domestic airlines – 49% |
FM Broadcasting - foreign equity 20% |
Telecom services- Foreign equity 74% |
News and current affairs- 26% |
Private sector banks- 74% |
Broadcasting- cable, DTH, up-linking – foreign equity 49% |
Mining of diamonds and precious stones-
100% |
Trading- wholesale cash and carry, export trading, etc., 100% |
Exploration and mining of coal and lignite for captive consumption- 74% |
Tea plantation – 100% |
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Development of airports- 100% |
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Courier services- 100% |
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Business
Opportunity India |
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