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Govt Relaxes FDI Norms In 15 Sectors

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In a move that is considered vital to attract foreign investment, the government opened key sectors in the Indian economy to FDI, including defence and construction.

This comes close on the heels of a massive defeat in the Bihar elections, after which it was perceived that the government would be forced to announce populist measures. Here are some of the initiatives.

Govt Relaxes FDI Norms In 15 Sectors
1) Foreign Direct Investment (FDI) would be allowed in the defence sector under the automatic route. One of the important reforms is that 100 per cent FDI has been allowed in the construction sector where the projects have been completed.
 

2) The FDI limit in the Direct to Home, which was earlier capped to 75 per cent, has now been increased to 100 per cent.

3) Retailing firms that operate under a single brand have been allowed to sell products through e-commerce. However, this would need the government's approval.

4) Manufacturers have been permitted to sell their products through wholesale/retail - including through e-commerce. Also, Foreign Institutional Investors, Foreign Portfolio Investors and Qualified Institutional Investors can now invest upto 75 per cent in a company.

5) The Foreign Investment Promotion Board can now clear proposals upto Rs 5000 crores, as against Rs 3000 crores.
The steps taken by the government are expected to increase investments into the country and also facilitate the ease of doing business.

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