In the growth of Indian economy , the contribution of the Foreign Direct Investment(FDI) can not be ignored. With the advent of the Modi Government, it is increasing by leaps and bounds. Given below is a useful compilation of the various sectors with their respective FDI limits that can be very useful from the perspective of the forthcoming examinations of Banking in 2015.
(A) SECTORS WITH RESTRICTIONS
- Lottery Business including Government /private lottery, online lotteries, etc.
- Gambling and Betting including casinos etc.
- Chit funds
- Nidhi company-(borrowing from members and lending to members only).
- Trading in Transferable Development Rights (TDRs)
- Real Estate Business (other than construction development) or Construction of Farm Houses
- Manufacturing of Cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes
- Activities / sectors not open to private sector investment e.g. Atomic Energy and Railway Transport (other than construction, operationÂ and maintenance of (i) Suburban corridor projects through PPP, (ii) High speed train projects, (iii) Dedicated freight lines, (iv) Rolling stock including train sets, and locomotives/coaches manufacturing and maintenance facilities, (v) Railway Electrification, (vi) Signaling systems, (vii) Freight terminals, (viii) Passenger terminals, (ix) Infrastructure in industrial park pertaining to railway line/sidings including electrified railway lines and connectivities to main railway line and (x) Mass Rapid Transport Systems.)
- Services like legal, book keeping, accounting & auditing.
(B)SECTORS WITH CAPS
- Petroleum Refining by PSU (49%).
- Teleports (setting up of up-linking HUBs/Teleports),Direct to Home (DTH), Cable Networks (Multi-system operators (MSOs) operating at national, state or district level and undertaking upgradation of networks towards digitalization and addressability), Mobile TV and Headend-in-the-Sky Broadcasting Service (HITS) â€“ (74%).
- Cable Networks (49%).
- Broadcasting content services- FM Radio (26%), uplinking of news and current affairs TV channels (26%).
- Print Media dealing with news and current affairs (26%).
- Air transport services- scheduled air transport (49%), non-scheduled air transport (74%).
- Ground handling services â€“ Civil Aviation (74%).
- Satellites- establishment and operation (74%).
- Private security agencies (49%).
- Private Sector Banking- Except branches or wholly owned subsidiaries (74%).
- Public Sector Banking (20%).
- Commodity exchanges (49%).
- Credit information companies (74%).
- Infrastructure companies in securities market (49%).
- Insurance and sub-activities (49%).
- Power exchanges (49%).
- Defence (49% above 49% to CCS).
(C)SECTORS REQUIRING CENTRAL GOVERNMENT APPROVAL
- Tea sector, including plantations â€“ 100%.
- Mining and mineral separation of titanium-bearing minerals and ores, its value addition and integrated activities -100%.
- FDI in enterprise manufacturing items reserved for small scale sector â€“ 100%.
- Defence â€“ up to 49% under FIPB/CCEA approval, beyond â€“ 49% under CCS approval (on a case-to-case basis, wherever it is likely to result in access to modern and state-of-the-art technology in the country).
- Teleports (setting up of up-linking HUBs/Teleports), Direct to Home (DTH), Cable Networks (Multi-system operators operating at National or State or District level and undertaking upgradation of networks towards digitalization and addressability), Mobile TV and Headend-in-the Sky Broadcasting Service(HITS) â€“ beyond 49% and up to 74%.
- Broadcasting Content Services: uplinking of news and current affairs channels â€“ 26%, uplinking of non-news and current affairs TV channels â€“ 100%.
- Publishing/printing of scientific and technical magazines/specialty journals/periodicals â€“ 100%.
- Print media: publishing of newspaper and periodicals dealing with news and current affairs- 26%, Publication of Indian editions of foreign magazines dealing with news and current affairs- 26%.
- Terrestrial Broadcasting FM (FM Radio) â€“ 26%.
- Publication of facsimile edition of foreign newspaper â€“ 100%.
- Airports â€“ brownfield â€“ beyond 74%.
- Non-scheduled air transport service â€“ beyond 49% and up to 74%.
- Ground-handling services â€“ beyond 49% and up to 74%.
- Satellites â€“ 74%.
- Private securities agencies â€“ 49%.
- Single brand retail â€“ 100%.
- Asset reconstruction company â€“ 100%
- Banking private sector (other than WOS/Branches) â€“ beyond 49% and up to 74%, public sector â€“ 20%.
- Pharmaceuticals â€“ brownfield â€“ 100%.
- Medical Devices -100%
(D)RECENT POLICY CHANGES
- FDI in commodity exchanges, stock exchanges & depositories, power exchanges, petroleum refining by PSUs, courier services under the government route has now been brought under the automatic route.
- Removal of restriction in tea plantation sector.
- FDI limit of 26% in defence sector raised to 49% under Government approval route. Foreign Portfolio Investment up to 24% permitted under automatic route. FDI beyond 49% is also allowed on a case to case basis with the approval of Cabinet Committee on Security.
- Construction, operation and maintenance of specified activities of Railway sector opened to 100% foreign direct investment under automatic route.
- ( Courtesy: www.makeinindia.com)
Note : The above mentioned data is as on October 15, 2015.
Compiled by Kandarp Rai