India announces easing of foreign direct investment rules

Now, up to 100 per cent FDI has been permitted in the defence sector with simple riders.

The government has allowed up to 100 percent FDI in defence and done away with the requirement of “state of the art” technology while considering FDI cases of above 49 percent investment. These major decisions affirm that India is open for business from the world, and would contribute greatly to investments and development of the country, added the CII statement.

The stock markets also reacted positively to the news of FDI reforms even as they recovered from early morning plunge after talking-up by influential market-men that helped counter Rexit (Rajan’s exit) jitters.

India’s domestic traffic has been growing in double digit since last 21 months owing to a host of factors including low fuel prices, ease of doing business and capacity augmentation by the domestic carriers, among others.

In other changes, India allowed 100 per cent FDI in civil aviation, following on from last week’s launch of a new policy that lowered barriers to entry for airlines that want to fly global routes. However, Apple has stated that it has started buying chargers from India.

In order to increase job opportunities in India and provide employment to its denizens, the Government has made radical changes in FDI policies in various sectors. “It has helped in boosting investor confidence and with the new changes, we expect to increase more FDI”, he said.

Commerce and Industry Minister Nirmala Sitharaman told reporters later that the steps taken on Monday were in line with the idea of making India a preferred destination for industry with a focus on employment. Find us on Facebook too! It is imperative to note here that during the a year ago, Government had relaxed FDI norms pertaining to a dozen sectors which led to an all-time high of $55.46 billion, in terms of FDI flows.

The government has permitted up to 49 percent FDI under the automatic route. However, it was felt that the country has potential to attract more FDI which can be achieved by further simplifying the FDI regime.

Automatic approval for 100 per cent FDI in broadcasting activities such as cable networks and mobile television. Investments beyond 49 per cent would need to be approved by the government. In green field pharmaceuticals, 100 per cent FDI is already allowed under automatic route. Now, brownfield projects, too, will come under automatic route for up to 74 per cent.