Big bang reforms: 10 key FDI norms relaxed

NEW DELHI: The Union Government radically liberalised the FDI regime on Monday. With these decisions, 100% foreign direct investment in most sectors of the economy will now be via the automatic route. India is now the most open economy in the world for FDI, the Government said while announcing the new norms. The following key decisions were taken at a high-level meeting chaired by Prime Minister Narendra Modi: 100% FDI under government approval route for trading, including through e-commerce, in respect of food products manufactured or produced in India. FDI beyond 49% in defence sector through government approval route, in cases resulting in access to modern technology in the country or for other reasons to be recorded.  The condition of access to ‘state-of-art’ technology in the country has been done away with. FDI limit for defence sector has also been made applicable to Manufacturing of Small Arms and Ammunitions covered under Arms Act 1959. 100 per cent FDI through automatic route for teleports, DTH, cable network services. 74% FDI under automatic route in brownfield pharmaceuticals and government approval route beyond 74%. 100% FDI under automatic route in Brownfield Airport projects. 100% FDI in domestic airlines, with FDI up to 49% permitted under automatic route and FDI beyond 49% through Government approval. For NRIs, 100% FDI will continue to be allowed under automatic route. FDI beyond 49% and up to 74% in private security agencies permitted with government approval route. As per FDI Policy 2016, FDI in Animal Husbandry (including breeding of dogs), Pisciculture, Aquaculture and Apiculture is allowed 100% under Automatic Route under controlled conditions. It has been decided to do away with this requirement of ‘controlled conditions’ for FDI in these activities. It has now been decided to relax local sourcing norms 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.