New Delhi: Prime Minister Narendra Modi on Tuesday said the decision to ease FDI norms in 15 sectors demonstrates the government's "unequivocal and unwavering" commitment to development and reforms whose fruits should touch every citizen and every part of India.
He asserted that the country is "unstoppable" on the path of economic progress and the government wanted the world to see the tremendous opportunities India offers.
The PM said that the government's reforms push will benefit the youth and is another example of emphasis on "minimum government, maximum governance".
The FDI-related reforms will touch 15 sectors and will ease, rationalize and simplify processes, he said.
Pushing ahead with major reforms, the government on Tuesday relaxed foreign investment rules in 15 sectors such as civil aviation, banking, defence, retail and news broadcasting and eased the process for approval of FDI.
While 100 per cent foreign direct investment (FDI) has been allowed in DTH, cable network and plantation crop, overseas investment limit in uplinking of news and current affairs TV channels has been raised to 49 per cent from 26 per cent.
The government relaxed conditions for FDI in single-brand retail and allowed 100 per cent FDI under automatic route in duty-free shops and Limited Liability Partnerships (LLP) and eased foreign investment norms in the defence sector.
It has also raised the FIPB's monetary limit to Rs 5,000 crore from Rs 3,000 crore for approving FDI proposals.
"India is unstoppable on the path of economic progress. Government wants the world to see the tremendous opportunities India offers," the PMO said, adding, "The FDI-related reforms will touch 15 sectors and will ease, rationalize and simplify processes."
Reacting to the government's move, economic affairs secretary Shaktikanta Das said, "The government's decision on liberalising FDI policy is a welcome step and is part of improving ease of doing business. These decisions come into force with immediate effect."
DIPP secretary Amitabh Kant said: "This is Diwali gift for investors. This is the biggest bang reform of the government."
In the construction development sector, minimum capitalisation norms and floor area restrictions have been removed. The government has also eased exit norms for foreign players in the sector.
"Hundred per cent FDI under automatic route has been allowed in completed projects for operation and management of townships, malls/shopping complexes and business centres," the commerce and industry ministry said in a statement.
In the defence sector, 49 per cent foreign investment has been allowed under the automatic route and anything beyond through the Foreign Investment Promotion Board (FIPB) nod.
Earlier, the investors were required to take approval of Cabinet Committee on Security for foreign investment above 49 per cent.
"Portfolio investment and investment by Foreign Venture Capital Investor (FVCIs) will be allowed up to permitted automatic route level of 49 per cent," it clarified.
In case of infusion of fresh foreign investment within the permitted automatic route level, resulting in a change in the ownership pattern or transfer of stake by existing investor to new foreign investor, government approval will be required."
In the broadcasting sector, 100 per cent FDI has been allowed in DTH, teleports, mobile TV and cable networks. Of this, 49 per cent will be allowed under automatic route and beyond that will need FIPB nod.
In the case of terrestrial broadcasting FM (FM radio) and uplinking of news and current affairs' TV channels, the foreign investment limit has been raised from 26 per cent to 49 per cent under the approval route.
As for the up-linking of non-news and current affairs' TV channels, 100 per cent FDI has been now permitted under the automatic route. Earlier, it was allowed under the government approval route.
In the private banking sector, the government has introduced full fungibility of foreign investment and accordingly, "FIIs/FPIs/QFIs, following due procedure, can now invest up to sectoral limit of 74 per cent, provided there is no change of control and management of the investee company".
Earlier, portfolio investment was permitted up to 49 per cent.
