FinMin plans to revise FDI norms again

Posted By: Religare
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The finance ministry once again plans to tweak the Foreign Direct Investment (FDI) norms, after opening up sectors like retail, aviation, power, broadcast, during last September, said a media report.

As per the reports, the ministry wants to minimize the layers of caps, clearly define the FDI break-up and foreign institutional investment (FII) sub-limits, and solve the ambiguity on Greenfield and brownfield projects.

"There are different caps. In some cases FDI-FII break-up is given, but in some it is not there. There is a negative list where FDI is not permitted; distinction between brownfield and greenfield investment is too complicated; and then there are the automatic and approval routes," said the report quoting a finance ministry official.

This confusion over Greenfield/brownfield projects arose last month when AirAsia proposed to buy 49 per cent stake in a new airline to be started with Tata Group. Civil aviation ministry opposed the proposal saying that FDI was allowed for existing projects only.

Meanwhile, the aim of reducing the layers of caps in FDI will attract foreign investors. Currently, there are ceilings — at 26 per cent, 49 per cent, 51 per cent, 74 per cent and 100 per cent in various sectors.

Read more about: finance ministry
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