Government details revised FDI regulations
17 Feb 2009
The government has issued detailed guidelines on a liberal and investor-friendly foreign investment policy, under which foreign direct investment (FDI) up to 100 per cent is permitted through the automatic route in most sectors/activities.
Accordingly, FDI up to 26 per cent, under the FIPB route, is allowed for defence production subject to licensing under `Industries (Development & Regulation) Act, 1951' and guidelines on FDI in production of arms and ammunition.
In the air transport services sector, the government said, no foreign airlines would be allowed to participate directly or indirectly in the equity of an air service undertaking.
FDI up to 49 per cent and investment by non-resident Indians (NRI) up to 100 per cent will be allowed on the automatic route in domestic scheduled passenger airline sector.
FDI up to 74 per cent and investment by non-resident Indians (NRI) up to 100 per cent will be allowed on the automatic route in non-scheduled airlines, chartered airlines, and cargo airlines.
FDI up to 74 per cent and investment by NRI up to 100 per cent will be allowed on the automatic route in ground handling services; and
FDI up to 100 per cent will be allowed on the automatic route in maintenance and repair organisations; flying training institutes; technical training institutions; and helicopter services/seaplane services.
In the telecommunications sector, including basic and cellular, unified access services, national/ international long distance, V-Sat, public mobile radio trunked services (PMRTS), global mobile personal communication services (GMPCS) and other value added telecom services, equity has been capped at 49 per cent through the automatic route via FDI, FII, NRI, FCCBs, ADRs, GDRs, convertible preference shares and at 74 per cent through the FIPB route subject to guidelines.
Subject to licensing and security requirements notified by the department of telecommunications, FDI will also be allowed up to 49 per cent through the automatic route and up to 74 per cent via the FIPB route in ISP with gateways, radio-paging and end-to-end bandwidth.
Subject to the condition that such companies shall divest 26 per cent of their equity in favour of Indian public in 5 years, if these companies are listed in other parts of the world and also subject to licensing and security requirements, where required, FDI of up to 49 per cent through the automatic route and up to 100 per cent via FIPB route will be allowed in ISP without gateway, infrastructure provider providing dark fibre, right of way, duct space, tower (Category I); electronic mail and voice mail.
Subject to sectoral requirements, FDI up to 100 per cent will be allowed in the manufacture of telecom equipments through the automatic route.
Subject to the guidelines notified by the ministry of information and broadcasting, FDI up to 26 per cent will be allowed in the print media, including publishing of newspaper and periodicals dealing with news and current affairs; and up to 100 per cent in publishing of facsimile edition of foreign newspapers, scientific magazines/specialty journals/periodicals, according t the government press note.
The policy on FDI is reviewed on a continuing basis through inter-ministerial consultations, the release said.
The UNCTAD's World Investment Reports for 2007 and 2008 have rated India as the second most attractive investment destination, the release noted.
