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Inter-ministerial group mulls easing FDI norms in India

Oct '19
Pic: Shutterstock
Pic: Shutterstock
An Indian inter-ministerial group recently discussed the scope of further easing foreign direct investment (FDI) norms to attract investors. The meeting was chaired by department for promotion of industry and internal trade (DPIIT) secretary Guruprasad Mohapatra. Officials from defence, home affairs, finance and information and broadcasting ministries attended.

DPIIT is mulling over relaxing norms in sectors where 100 per cent FDI is not permitted at present through automatic route, according to a news agency report.

FDI is allowed through automatic route in most of the sectors, but in areas like defence, telecom, media, pharmaceuticals and insurance, government approval is required. In some sectors like telecom, insurance, banking, and media, there is cap on FDI limit as well.

Under the government route, a foreign investor has to take prior approval of the concerned ministry or department, while through the automatic route, an investor just has to inform the Reserve Bank of India after the investment is made.

There are nine sectors where FDI is prohibited and that includes lottery business, gambling and betting, chit funds, Nidhi company, real estate business and manufacturing of cigars, cheroots, cigarillos and cigarettes using tobacco. Recently, the government relaxed FDI norms in several sectors like single brand retail trading, contract manufacturing and coal mining.

Currently, a standard operating procedure is laid out by the DPIIT through which foreign direct investment proposals are processed within a fixed time period of 8-10 weeks.

Fibre2Fashion News Desk (DS)

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November 2019

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