India has eased foreign direct investment norms in 15 major sectors in a bid to drum up investment and speed growth. The government also increased the financial power of the Foreign Investment Promotion Board to give single window clearance for investment projects of up to 50 billion rupees ($753.35 million), from 30 billion.
The salient measures are:
- Limited Liability Partnerships, downstream investment and approval conditions.
- Investment by companies owned and controlled by Non-Resident Indians (NRIs)
- Establishment and transfer of ownership and control of Indian companies
- Agriculture and Animal Husbandry
- Plantation
- Mining and mineral separation of titanium bearing minerals and ores, its value addition and integrated activities
- Defence
- Broadcasting Sector
- Civil Aviation
- Increase of sectoral cap
- Construction development sector
- Cash and Carry Wholesale Trading / Wholesale Trading (including sourcing from MSEs)
- Single Brand Retail Trading and Duty free shops
- Banking-Private Sector
- Manufacturing Sector
The government statement listed the sectors where investment norms have been eased, but did not cite precise steps. Within defence manufacturing, firms can automatically increase foreign ownership to 49 percent, without seeking government approval.
This move makes it easier for private sector lenders such as Axis bank, Kotak Mahindra Bank and Yes Bank to raise fresh foreign capital, as foreign portfolio investors can buy stakes of up to 74 percent on condition there will be no change in control and management.
