Govt notifies changes in FDI policy

The government today notified changes in the foreign direct investment (FDI) policy in sectors including pharmaceuticals, defence and single-brand retail.
These decisions were announced earlier in the week with a view to make India more investor friendly and an attractive FDI destination.
"The decision will take immediate effect," the Department of Industrial Policy and Promotion (DIPP) said in a press note.
The changes in the policy include allowing 100 per cent FDI under government approval route for trading, including through e-commerce, in respect of food products manufactured and/or produced in India.
To attract investment in the defence sector, the government has removed the condition of 'state-of-art' technology, besides permitting foreign investment in manufacturing of small arms and ammunitions.

The government has also permitted 100 per cent FDI through automatic route in broadcasting carriage services like teleports, direct-to-home and mobile TV.

In a significant reform move, the government allowed 100 per cent FDI in airlines and relaxed norms for overseas investments in brownfield airports.
In private security agencies, FDI limit was raised to 74 per cent from 49 per cent earlier.
In single-brand retail trading, government said the mandatory local sourcing norm for foreign firms "will not be applicable up to three years from commencement of the business i.E opening of the first store for entities undertaking single brand retail trading of products have 'state of art' and 'cutting edge' technology and where local souring is not possible".

After completion of the exemption period, the foreign company in the next five years will have to meet the domestic sourcing norm at an annualised average rate of 30 per cent. Thereafter, they have to comply with the norm on an annual basis.
The DIPP also notified the changes in pharmaceuticals, in which government has allowed FDI upto 74 per cent through automatic route and beyond that under government approval.
The government has also relaxed the norms in animal husbandry sector.
Abhishek spoke about will and determination on the part
of the government to see that Japanese investments in India double but that requires "deeper strategic interaction and problem solving".

He expressed confidence that the two Asian economies shall work hard to realise the "fantastic potential" that exists in investments and trade between them.
Noting that India ranked number one in the survey on most favoured destination for Japanese investments conducted by Japan Bank for International Cooperation, he said it shows the kind of inclination Japanese companies have towards India.
Talking about the ease of doing business ranking of states based on 340 parameters, the DIPP secretary said: "We have now 10 states that have got more than 90 per cent score and we have 6 more states that have got more than 80 per cent."

There is "tremendous competition" among states to improve their business climate to attract investments.