The Centre on Monday announced a series of changes in its Foreign Direct Investment policy, which it claimed makes India “the most open economy in the world for FDI”. The condition of access to “state-or-art” technology in India has been scrapped.
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This does not mean automatic approval for defence deals.
Earlier: FDI of 49 per cent under automatic route and above this through government approval on case-by-case basis when it is likely to result in access to modern and “state-of-the-art” technology.
The government also approved up to 49 percent in scheduled air transport services via auto route and a 74 percent for brownfield aviation projects under government route.
Hours after Raghuram Rajan said he will not seek a second term as Reserve Bank chief, the government on Monday eased foreign direct investment (FDI) norms in pharma, aviation and defence sectors in what is being called a major reform move. Nearly every sector, including defence, will now be open to 100% FDI as long as the requisite government approvals are in place.
With a view to aid in modernization of the existing airports to establish a high standard and help ease the pressure on the existing airports, it has been made a decision to permit 100 percent FDI under automatic route in Brownfield Airport projects. Aimed at attracting more funds into the aviation sector with a high growth potential, the NDA government’s latest measure comes less than a week after the unveiling of the National Civil Aviation Policy.
Under the new setup, 49% will be through the automatic route and for anything beyond, government nod will be required.
In civil aviation sector, the government has chose to permit 100% FDI under automatic route in Brownfield Airport projects.
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. India already allows 100 percent ownership of greenfield pharma businesses.
Back in 2012, then UPA government had permitted 49 per cent FDI in domestic airlines by foreign carriers.
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Apple is expected to be a beneficiary of a three-year relaxation India is introducing on local sourcing norms with an extension of up to five years possible if it can be proven that products are “state of the art”.
