Centre Allows 100% FDI in Single Brand Retail

January 11, 2018

The Union Cabinet on Wednesday has approved amendments in the FDI (Foreign Direct Investment) policy for further liberalization in key sectors so as to further ease of doing business in India. The Centre’s move is expected   to augment FDI inflows contributing to growth of investment, income and employment.

The key amendments in the FDI Policy are as under:

  • 100% FDI under automatic route for Single Brand Retail Trading
  • 100% FDI under automatic route in Construction Development
  • Foreign airlines allowed to invest up to 49% under approval route in Air India
  • FIIs/FPIs allowed to invest in Power Exchanges through primary market
  • Definition of ‘medical devices’ amended in the FDI Policy

In view of the amendments in the FDI Policy to drive economic growth in the country the Centre has affected following approvals:

Government’s approval not required for FDI in Single Brand Retail Trading-  Earlier, the FDI policy on Single Brand Retail Trading allowed 49% FDI under automatic route, and FDI beyond 49% and up to 100% through Government approval route. It has now been decided to permit 100% FDI under automatic route for SBRT.

Civil Aviation– As per the extant policy, foreign airlines were allowed to invest under Government approval route in the capital of Indian companies operating in air transport services, up to the limit of 49% of their paid-up capital. However, this provision was presently not applicable to Air India, thereby implying that foreign airlines could not invest in Air India. It has now been decided to do away with this restriction and allow foreign airlines to invest up to 49% under approval route in Air India.

Construction Development: Townships, Housing, Built-up Infrastructure and Real Estate Broking Services– In this context the Centre has clarified that real-estate broking service does not amount to real estate business and is therefore, eligible for 100% FDI under automatic route.

Pharmaceuticals- FDI policy on Pharmaceuticals sector inter-alia provides that definition of medical device as contained in the FDI Policy would be subject to amendment in the Drugs and Cosmetics Act. As the definition as contained in the policy is complete in itself, it has been decided to drop the reference to Drugs and Cosmetics Act from FDI policy. Further, it has also been decided to amend the definition of ‘medical devices’ as contained in the FDI Policy.

 

About the Author

Shilpi Sharan

- Shilpi Sharan is the Editor at Vakilno1.com - an Advocate with extensive knowledge in myriad fields of Law. She has a flair of writing and has legal publications in national and international law magazines to her credit. She focuses on legal research and aims at raising public awareness of laws in India.