[orc]The government has recently made changes to the FDI policy by opening up more sectors. Here is a consolidated list of the FDI policy as of August 2017.
Many changes have been made to the Foreign Direct Investment (FDI) policy in the last few years. Further, FDI is also allowed through two different routes namely, Automatic and the Government route. The erstwhile Foreign Investment Promotion Board (FIPB) has been phased out recently. In the automatic route, foreign entities do not need the prior approval of the government to invest. However, they have to inform the RBI about the amount of investment within a stipulated time period. In the government route, any investment can be made only after the prior approval of the government. Various other conditions as defined in the consolidated FDI policy are applicable to various sectors. In specific sectors, the FDI is prohibited.
Sector wise FDI Limits
| Sector | FDI Limit | Entry Route & Remarks |
|---|---|---|
| Agriculture & Animal Husbandry • Floriculture, Horticulture, Apiculture and Cultivation of Vegetables & Mushrooms under controlled conditions • Development and Production of seeds and planting material • Animal Husbandry(including breeding of dogs), Pisciculture, Aquaculture • Services related to agro and allied sectors | 100% | Automatic |
| Plantation Sector • Tea sector including tea plantations • Coffee plantations • Rubber plantations • Cardamom plantations • Palm oil tree plantations • Olive oil tree plantations | 100% | Automatic |
| Mining Mining and Exploration of metal and non-metal ores including diamond, gold, silver and precious ores but excluding titanium bearing minerals and its ores | 100% | Automatic |
| Mining (Coal & Lignite) | 100% | Automatic |
| Mining Mining and mineral separation of titanium bearing minerals and ores, its value addition and integrated activities | 100% | Government |
| Petroleum & Natural Gas Exploration activities of oil and natural gas fields, infrastructure related to marketing of petroleum products and natural gas, marketing of natural gas and petroleum products etc | 100% | Automatic |
| Petroleum & Natural Gas Petroleum refining by the Public Sector Undertakings (PSU), without any disinvestment or dilution of domestic equity in the existing PSUs. | 49% | Automatic |
| Defence Manufacturing | 100% | Automatic up to 49% Above 49% under Government route in cases resulting in access to modern technology in the country |
| Broadcasting • Teleports(setting up of up-linking HUBs/Teleports) • Direct to Home (DTH) • Cable Networks (Multi System operators (MSOs) operating at National or State or District level and undertaking upgradation of networks towards digitalization and addressability • Mobile TV • Head end-in-the Sky Broadcasting Service(HITS) | 100% | Automatic |
| Broadcasting Cable Networks (Other MSOs not undertaking up gradation of networks towards digitalization and addressability and Local Cable Operators (LCOs)) | 100% | Automatic |
| Broadcasting Content Services • Terrestrial Broadcasting FM(FM Radio) • Up-linking of ‘News & Current Affairs’ TV Channels | 49% | Government |
| Up-linking of Non-‘News & Current Affairs’ TV Channels/ Down-linking of TV Channels | 100% | Automatic |
| Print Media • Publishing of newspaper and periodicals dealing with news and current affairs • Publication of Indian editions of foreign magazines dealing with news and current affairs | 26% | Government |
| Publishing/printing of scientific and technical magazines/specialty journals/ periodicals, subject to compliance with the legal framework as applicable and guidelines issued in this regard from time to time by Ministry of Information and Broadcasting. | 100% | Government |
| Publication of facsimile edition of foreign newspapers | 100% | Government |
| Civil Aviation – Airports Green Field Projects & Existing Projects | 100% | Automatic |
| Civil Aviation – Air Transport Services • Scheduled Air Transport Service/ Domestic Scheduled Passenger Airline • Regional Air Transport Service (Foreign Airlines are barred from Investing in Air India) | 100% | Automatic up to 49% Above 49% under Government route 100% Automatic for NRIs |
| Civil Aviation • Non-Scheduled Air Transport Service • Helicopter services/seaplane services requiring DGCA approval • Ground Handling Services subject to sectoral regulations and security clearance • Maintenance and Repair organizations; flying training institutes; and technical training institutions | 100% | Automatic |
| Construction Development: Townships, Housing, Built-up Infrastructure | 100% | Automatic |
| Industrial Parks (new & existing) | 100% | Automatic |
| Satellites- establishment and operation, subject to the sectoral guidelines of Department of Space/ISRO | 100% | Government |
| Private Security Agencies | 74% | Automatic up to 49% Above 49% & up to 74% under Government route |
| Telecom Services | 100% | Automatic up to 49% Above 49% under Government route |
| Cash & Carry Wholesale Trading | 100% | Automatic |
| E-commerce activities (e-commerce entities would engage only in Business to Business (B2B) e-commerce and not in Business to Consumer (B2C) e-commerce.) | 100% | Automatic |
| Single Brand retail trading Local sourcing norms will be relaxed up to three years and a relaxed sourcing regime for another five years for entities undertaking Single Brand Retail Trading of products having ‘state-of-art’ and ‘cutting edge’ technology. | 100% | Automatic up to 49% Above 49% under Government route |
| Multi Brand Retail Trading | 51% | Government |
| Duty Free Shops | 100% | Automatic |
| Railway Infrastructure Construction, operation and maintenance of the following • Suburban corridor projects through PPP • High speed train projects • Dedicated freight lines • Rolling stock including train sets, and locomotives/coaches manufacturing and maintenance facilities • Railway Electrification • Signaling systems • Freight terminals • Passenger terminals • Infrastructure in industrial park pertaining to railway line/sidings including electrified railway lines and connectivities to main railway line • Mass Rapid Transport Systems. | 100% | Automatic |
| Asset Reconstruction Companies | 100% | Automatic |
| Banking- Private Sector | 74% | Automatic up to 49% Above 49% & up to 74% under Government route |
| Banking- Public Sector | 20% | Government |
| Credit Information Companies (CIC) | 100% | Automatic |
| Infrastructure Company in the Securities Market | 49% | Automatic |
| Insurance • Insurance Company • Insurance Brokers • Third Party Administrators • Surveyors and Loss Assessors • Other Insurance Intermediaries | 49% | Automatic |
| Pension Sector | 49% | Automatic |
| Power Exchanges | 49% | Automatic |
| White Label ATM Operations | 100% | Automatic |
| Financial services activities regulated by RBI, SEBI, IRDA or any other regulator | 100% | Automatic |
| Pharmaceuticals(Green Field) | 100% | Automatic |
| Pharmaceuticals(Brown Field) | 100% | Automatic up to 74% Above 74% under Government route |
| Food products manufactured or produced in India Trading, including through e-commerce, in respect of food products manufactured or produced in India. | 100% | Government |
Prohibited Sectors
FDI is prohibited in the following sectors
- Lottery Business including Government/private lottery, online lotteries, etc.
- Gambling and Betting including casinos etc.
- Chit funds
- Nidhi company
- Trading in Transferable Development Rights (TDRs)
- Real Estate Business or Construction of Farm Houses (Real estate business does not include development of townships, construction of residential /commercial premises, roads or bridges )
- Manufacturing of cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes
- Activities/sectors not open to private sector investment e.g. Atomic Energy and Railway operations (other than permitted activities)
8 Comments
Very useful. Nicely summed up. I couldn’t find these details properly anywhere else.
Hi,
one query.
Banking- Private Sector – 74% ( it means decision will be taken by foreign company because govt. has only 26% share)
Can you explain this?- Automatic up to 49%, Above 49% & up to 74% under Government route ?
‘Government route’ means that investment in the capital of resident entities by
non-resident entities can be made only with the prior approval of Government
(Competent Ministry/Department for grant of approval).
http://dipp.nic.in/sites/default/files/CFPC_2017_FINAL_RELEASED_28.8.17.pdf
can u suggest how to use fdi fund in pvt ltd company..??
what’s process ???
What about Power Sector, specifically Solar Power Sector in India – Is FDI allowed there?
FDI up to 100% under the automatic route is permitted in Renewable Energy Generation and Distribution projects subject to the provisions of the Electricity Act, 2003.
https://mnre.gov.in/file-manager/UserFiles/First-Announcement-REINVEST.pdf
business support services and IT sector fall under which line of activity pl
In FCGPR form it is specifically asked to give scheduled inustry
can we use fund from fdi for payment of existing debt in LLP?