economies. On the other hand, the sectors that are more restricted to foreign investment include electric power transmission and distribution, newspaper publishing and television broadcasting. The electricity sector is more restricted than in other regions, with foreign equity ownership of companies limited to less than a 50% stake in Costa Rica and The República Bolivariana de Venezuela and fully closed in Mexico. Some economies in the region are revisiting their policies. For instance, Brazil recently revoked the restriction established by Law No. 8977/1995 with respect to foreign participation in cable television companies and currently is discussing opening up other sectors, including civil aviation (where an increase of the limit for foreign investment from 20% to 49% is in discussion). In addition, Peru had been opening its only restricted sector (the international air passenger sector) by gradually raising the maximum allowed foreign ownership from 49% of voting shares at the time of incorporation to 70% of voting shares after six months of incorporation.

**Figure 7. Foreign equity ownership index in South Asia**

<!-- Start of picture text --> Bangladesh 97<br>Pakistan 93<br>Afganistan 87<br>Regional average 85<br>India 82<br>Nepal 80<br>Sri Lanka 74<br><!-- End of picture text -->

> _Source: FDI Regulations_ 0 database 2012

Economies in South Asia restrict foreign ownership in agriculture, forestry and the media industries more than most other regions (Figure 7). In Sri Lanka, foreign equity ownership is capped at 40% and in India and Bangladesh forestry is closed to foreign investors. Bangladesh, in 2010, allowed 100% of foreign equity ownership of companies in the forestry sector but now the sector has become a “reserved industry” under the 2010 National Industrial Policy (which defines a reserved industry as one which is kept reserved for public investment due to national security or other reasons). In general, Sri Lanka, Nepal and India have the region’s most restrictions on foreign equity ownership. However, it is worth mentioning that India is progressively liberalizing its FDI regime, even though the reforms are taking place in sectors that are for the most part not covered by this analysis. For instance, in the transport sector, foreign airlines are now permitted to own up to 49% in scheduled and non-scheduled air transport services; in the energy sector, FDI is now allowed up to 49% in power trading exchanges; the country also liberalized FDI in broadcasting, including cable networks and mobile TV, up to a 74% ownership ceiling and in the retail sector, the country allowed foreign investment in single-brand retail trading - from a previous 51% foreign ownership limit to now 100% and it also allowed FDI in multibrand retail trading up to 51% under the government approval route, among others. Most SAR economies impose foreign equity restrictions in the media industries. Electricity transmission and distribution, freight rail transportation and, to a lesser extent, water distribution are sectors that tend to be dominated by state-owned monopolies in the region. In contrast, sectors with the least foreign ownership restrictions include oil and gas, manufacturing, electricity generation from renewable sources, wireless telecommunications, higher education, courier services, accommodation, waste management and agriculture. Meanwhile, Pakistan has opened the insurance sector from 49% in 2010 to 100% in 2012.

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