Source: The Hindu Business Line, Aug 31, 2016
New Delhi: The Union Cabinet today approved the second instalment FDI of reforms, which the Centre has announced in June covering diverse sectors including Defence, food-processing, single brand retail and broadcasting.
The ex-post-facto approval for the reforms in the Foreign Direct Investment regime was given by the Cabinet in its meeting on Wednesday.
Under the amended rules, 100 per cent FDI with government approval is permitted for trading, including through e-commerce, in respect of food products manufactured and/or produced in India.
In Defence, foreign investment beyond 49 per cent is permitted through the approval route wherever it is likely to result in access to modern technology or for other reasons to be recorded. The state-of-the-art technology condition has been dropped.In the broadcasting sector, the amendments allow 100 per cent FDI via the automatic route, up from 49 per cent.
To encourage investments in pharmaceuticals, the amendments allow 74 per cent FDI under the automatic route in the brownfield (existing projects) segment. Earlier, all FDI in brownfield projects had to come in through the government approval route.
Similarly, in the civil aviation sector, 100 per cent FDI under the automatic route has been allowed in brownfield projects as against 49 per cent earlier.
Local sourcing norms have been relaxed up to three years, with government approval for entities undertaking single brand retail trading of products having state-of-the-art and cutting edge technology. Thereafter, sourcing norms would be applicable.