The Department of Industrial Policy and Promotion (DIPP) has introduced the Consolidated Foreign Direct Investment policy for 2017-2018 with effect from 28th August 2017.
The changes brought over by the Ministry are:
- Abolition of FIPB: The DIPP has abolished the Department of Foreign Investment Promotion Board and the further FDI proposals and sanctioning will be handled by the new administration/ ministry. Competent authorities that is the concerned department or authority shall manage the approval of foreign investments under current FDI and FEMA rules. The Competent Authorities will examine the existing proposals by following the guidelines set by the DIPP.
- Start-up Foreign Direct Investment: The ministry has allowed 100% FDI’s in start-ups and as a first have listed them in a separate section. Start-ups have given the right to issues equity or equity-linked instruments as well as debt instruments to foreign venture capital investors. They can also issue convertible notes to non-citizens subject to certain terms and conditions.
- Lenient investment of FDI in some sectors:
- Agriculture and animal husbandry: 100% FDI in apiculture, conditions relaxed for animal husbandry, aquaculture, apiculture, and pisciculture.
- Manufacturing sector: 100% FDI through Government route for retail trading and e-commerce for foods manufactured or produced in India.
- Defence industry: 100% FDI allowed.
- Broadcasting carriage services: Infusion of fresh investment beyond 49% requires Government approval.
- Airports(existing projects): 100% FDI allowed when compared to 74% FDI allowed before.
- Transport service(Regional air transport or Domestic scheduled passenger airline): 100% FDI allowed under automatic route.
- Private agency securities: 49% automatic route. Beyond 49% and up to 74% through Government route.
- Single brand product retailing: Sourcing norms are relaxed.
- Pharmaceuticals – Brownfield: up to 74% FDI through automatic route. additional conditions as given in the FDI policy.
- Other financial services: The investment cap 100% remains the same but will be regulated by the financial regulator authority as authorized by the Government.
These are the changes brought by the DIPP in the Foreign Direct Investment rules and regulations.
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