Lok Sabha Question No. 1641 (UNSTARRED), answered on 2016-11-25
Subject: Investment Rules
Ministry: FINANCE
Asked by: RAJAN BABURAO  VICHARE

## GOVERNMENT  OF INDIA

## MINISTRY  OF FINANCE DEPARTMENT  OF ECONOMIC AFFAIRS LOK SABHA  UNSTARRED  QUESTION  NO. 16,41 TO BE ANSWERED ON 25th NOVEMBER  2016

(AGRAHAYANA  4, 1938 SAKA)

## lnveatment  Rules

## 1641. SHRI RAJAN VICHARE

## Will the Minister  of FINANCE  be pleased  to state:

- (a) whether  the Government  has simplified the investment  rules to attract more domestic and foreign investment;
- (b) if so,  the details  thereof;
- (c) whether the Foreign lnvestment Promotion Board (FIPB) has allowed  100% foreign investment in various sectors and increased  the percentage of foreign  investment  made through  the automatic route;  and
- (d) if so, the details thereof and the extent to which it is likely to give  an impetus to the investment  in the country?

## ANSWER Minister  of State (Finance)  (Shri Arjun Ram Meghwal)

- (a)  to (d) Government has put in place  a liberal,  transparent and investor-friendly  policy on Foreign Direct Investment (FDl) wherein most of the seclors  are open to FDI under the automatic route. The Government  reviews FDI policy  on an ongoing  basis and significant changes  are made in the FDI policy regime,  from time to time, to ensure that lndia remains increasingly  attractive and investor-friendly investment  destination. All such  policy  decisions are available on the website of the Foreign lnvestment Promotion Board (www.fipb.gov.in  ) The Finance Minister  has further announced a number  of measures  to encourage  FDI in lndia in the Budget Speech 2016-17. Recent steps taken by the Government  to boost foreign investments  in lndia  are given below:
- . 100% FDI permitted  under government  approval route for trading, including through ecommerce, in respect of food producls  manufactured  and/or  produced in lndia
- . ln Defence, FDI beyond 49% permitted through  government  approval route, in cases resulting in access to modern technology in the country or for other reasons  to be recorded
- . FDI limit for defence  made applicable  to Manufacturing  of Small Arms and Ammunitions covered  under Arms Act 1959

- . 100% FDI under automatic route allowed  in Broadcasting  Carriage Services
- . 7  4o/o FDI under  automatic route  permitted  in brownfield  pharmaceuticals
- . FDI beyond 74% under government approval  in brownfield  pharmaceuticals
- o 100% FDI under automatic route permitted  in Brownfield Airport projects
- . FDI limit for Scheduled Air Transport Service/ Domestic Scheduled Passenger Airline and Regional  Air Transport Service  raised to 100%
- o FDI up to 49% under automatic  route and FDI beyond 49olo through Government approval in Air Transport  Service/ Domestic Scheduled Passenger Airline  and Regional Air Transport  Service
- . Foreign airlines would continue to be allowed  to invest in capital of lndian companies operating scheduled and non-scheduled air-transport services up to the limit of 49% of their paid  up capital
- o  FDI limit for Private  Security  Agencies raised to 74%
- o  FDI up to 49% allowed under automatic route and, beyond 49% and up to 7 4o/o wilh government approval  in Private Security Agencies
- . RBI permission not required  for establishment of branch office, liaison office or project office or any other place of business in lndia if the principal business of the applicant is Defence, Telecom, Private Security  or lnformation  and Broadcasting,  in cases where FIPB approval  or license / permission  by the concerned  Ministry  / Regulator  obtained.
- o Local sourcing norms relaxed up to three  years for entities  undertaking Single Brand Retail Trading  of products having  "state-of-art"  and "cutting  edge" technology