Consolidated FDI Policy

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In the article we will discuss the FDI in Indian Economy, where it is permitted, where it is not.

FDI is prohibited in:

1. Lottery Business including Government/private lottery, online lotteries, etc.

2. Gambling and Betting including casinos etc.

3. Chit funds

4. Nidhi company

5. Trading in Transferable Development Rights (TDRs)

6. Real Estate Business or Construction of Farm Houses ‘Real estate business’ shall not include development of townships, construction of residential /commercial premises, roads or bridges and Real Estate Investment Trusts (REITs) registered and regulated under the SEBI (REITs) Regulations 2014.

a. But real-estate broking service is eligible for 100% FDI under automatic route.

7. Manufacturing of cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes

8. Activities/sectors not open to private sector investment e.g.(I) Atomic Energy and (II) Railway operation other than permitted activities mentioned as follow:

Sector/Activity % of Equity/FDI Cap Entry Route
Railway Infrastructure 100% Automatic

Foreign technology collaboration in any form including licensing for franchise, trademark, brand name, management contract is also prohibited for Lottery Business and Gambling and Betting activities.

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Foreign equity Sectoral Cap

Minimum Sectoral cap = the maximum amount which can be invested by foreign investors in an entity is composite and includes all types of foreign investments, direct and indirect in any form like FDI, FII,  FPI, NRI, FVCI, LLPs, DRs and Investment Vehicle of FEMA (Transfer or Issue of Security by Persons Resident Outside India) Regulations. It does not include Foreign Loan. But it includes FCCB as these bond can b converted into equity.

Sector/Activity % of Equity/FDI Cap Entry Route
Agriculture 100% in most of the activity. Automatic
Petroleum & Natural Gas: Petroleum refining by PSUs without any domestic equity dilution 49% Automatic
Petroleum & Natural Gas: other 100% Automatic
Defence 100% Automatic up to 49%

Government route beyond 49%

Broadcasting Carriage Services 100% Automatic
Broadcasting Content Services

ü  FM Radio, ‘News & Current Affairs’ TV Channels

49% Government
Broadcasting Content Services

ü  Non-‘News & Current Affairs’ TV

100% Automatic
Print Media

ü  newspaper and periodicals, Indian editions of foreign magazines dealing with news and current affairs

26% Government
Print Media

ü  scientific and technical magazines/specialty journals/ periodicals, facsimile edition of foreign newspapers

100% Government
Civil Aviation: Airports, Air Transport Services etc. 100% Automatic
Civil Aviation: Scheduled/Regional Air Transport Service

Including in Air India

100% Automatic up to 49%

(Automatic up to 100% for

NRIs)

Government route beyond 49%

Satellites- establishment and operation 100% Government
Private Security Agencies 74% Automatic up to 49%

Government route beyond 49% and up to 74%

Telecom Services 100% Automatic up to 49%

Government route beyond 49%

Single Brand product retail trading 100% Automatic ( Earlier : Automatic up to 49% and  Government route beyond 49%
Multi Brand Retail Trading 51% Government
Banking- Private Sector 74% Automatic up to 49%

Government route beyond 49% and up to 74%

Banking- Public Sector 20% Government
Infrastructure Company in the Securities Market 49% Automatic
Insurance 49% Automatic
Pension Sector 49% Automatic
Power Exchanges 49% Automatic ( earlier it was allowed in secondary market, now allowed in primary market as well)
Pharmaceuticals – Greenfield 100% Automatic
Pharmaceuticals- Brownfield 100% Automatic up to 74%

Government route beyond 74%

For more Detail refer:  http://dipp.nic.in/sites/default/files/CFPC_2017_FINAL_RELEASED_28.8.17.pdf ( Page 23)

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