Trade policy review report by the secretariat

partment of Commerce online information, "Export Import Data Bank"

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Source: WTO calculations, based on Department of Commerce online information, "Export Import Data Bank".

Table A2. 1 Sectors in which FDI is permitted


Foreign equity limit/route

Additional conditions


Floriculture, horticulture, apiculture and cultivation of vegetables and mushrooms under controlled conditions; development and production of seeds and planting material; animal husbandry (including dog breeding), pisciculture, aquaculture, under controlled conditions; and services related to agro and allied sectors


Use of genetically modified materials subject to the Foreign Trade (Development and Regulation) Act, 1992 and any other laws, regulations or policies applicable

Tea, including plantations


Compulsory divestment of 26% of the equity of the company in favour of an Indian partner/Indian public within five years; and prior approval of the State Government concerned required in case of any future land use change

Mining and petroleum

Mining and exploration of metal and non metal ores (including diamond, gold, silver and precious ores but not titanium bearing minerals and ores)


Subject to the Mines and Minerals (Development and Regulation) Act, 1957

Coal and lignite mining for captive consumption by power projects, iron and steel and cement units and other eligible activities


Setting up coal processing plants such as washeries subject to certain conditions


Mining and mineral separation of titanium bearing minerals and ores, its value addition and integrated activities, subject to sectoral regulations and the Mines and Mineral (Development and Regulation) Act 1957


FDI for the separation of titanium bearing minerals and ores is subject to value addition activities being set up in India along with transfer of technology; and the disposal of tailings during mineral separation are subject to regulations framed by the Atomic Energy Regulatory Board

Exploration of oil and natural gas fields, infrastructure related to marketing and marketing of petroleum products and natural gas, pipelines, LNG regasification infrastructure, market study and petroleum refining in the private sector


Subject to existing sectoral policy and regulatory framework in the oil marketing sector and on private participation in oil exploration and existing fields of national oil companies

Petroleum refining by the public sector undertakings (PSUs) without any disinvestment or dilution of domestic equity in existing PSUs



Power exchanges registered under the Central Electricity Regulatory Commission (Power Market) Regulations 2010

49% (FDI + FII/FPI)/automatic

Non-residents jointly or together may not own more than 5% of the equity of these companies


Manufacture of items reserved for micro and small enterprises


(Government approval required for equity above 24%)

Subject to sectoral limits, entry routes and other relevant sectoral regulations. Also subject to industrial licences under the Industries (Development and Regulation) Act, 1951. Specific conditions of the licence include a minimum export requirement of at least 50% of new or additional annual production of the reserved items within a period of 3 years from commencement of industrial production


- greenfield


- brownfield


Defence industry subject to Industrial licence under the Industries (Development and Regulation) Act 1951

49%/Government approval; above 49% through Cabinet Committee on Security on a case by case basis, wherever it is likely to result in access to modern and 'state of art' technology in the country.

Portfolio investment will not exceed 24% of the total equity of the company/automatic

Subject to licences issued by DIPP in consultation with the Ministry of Defence. Only for Indian companies or in partnership with an Indian company. The management of the company should be Indian with majority representation on the Board and residency requirements for the Chief Executives


Communication services

Broadcasting carriage services

- teleports (setting up of uplinking hubs/teleports); direct to home (DTH); cable networks; mobile TV; Headend in the sky broadcasting services (HITs)

74% (Government approval required for equity above 49% and up to 74%)

Subject to compliance with the relevant policy and regulations notified by the Ministry of Information and Broadcasting. Additional security requirements relate to the nationality of senior officials of the company; as well as security clearance for officials holding more than 10% of the shares of the company, renewable every two years; and prior permission from the Ministry before any changes to the Directors

Cable networks


Broadcasting content services

- terrestrial broadcasting FM (FM radio)


- uplinking of 'news and current affairs' TV channels


- uplinking of non-'news and current affairs' TV channels; downlinking of TV channels


Print media

- publishing of newspaper and periodicals dealing with news and current affairs

26% (by NRIs, PIOs, FII/FPIs)/


Also subject to the Guidelines for Publication of Indian editions of foreign magazines dealing with news and current affairs issued by the Ministry of Information and Broadcasting on 4 December 2008

- publication of Indian editions of foreign magazines dealing with news and current affairs

26% (by NRIs, PIOs, FII/FPIs)/


- publishing, printing of scientific and technical magazines, specialty journals, periodicals, subject to compliance with the legal framework as applicable and guidelines issued in this regard by the Ministry of Information and Broadcasting


FDI by owner of original foreign newspaper whose facsimile edition is to be published in India. Publication only by a company incorporated in India under the Companies Act 1956 and subject to the Guidelines for publication of newspapers and periodicals dealing with news and current affairs and publication of facsimile editions of foreign newspapers issued by the Ministry of Information and Broadcasting on 31 March 2006 and as amended

- publication of facsimile edition of foreign newspapers


- courier services for carrying packages, parcels and other items which do not come within the ambit of the Indian Post Office Act 1898 and excluding activities related to the distribution of letters


Telecommunications services

- telecommunications services

74%/automatic up to 49% (including FDI and FII, NRI, FCCBs, ADRs, GDRs and convertible preference shares held by foreign entity), Government above 49%

- ISPs with and without gateways (for satellite and marine cables); radio paging; end-to-end bandwidth

74%/automatic up to 49%, Government above 49%

- infrastructure provider, providing dark fibre, right of way, duct space, tower (IP category I); electronic mail; voice mail

100%/automatic up to 49%, Government above 49%

Satellites-establishment and operation


Subject to the sectoral guidelines of the Department of Space/ISRO

Financial services

- Asset reconstruction companies

100% of paid up capital (FDI and FII/FPI)/automatic up to 49%; Government approval above 49%

- Banks (private sector)

74% (including FII/FPIs) – automatic up to 49%

At least 26% of paid up capital to be held by residents except for wholly owned subsidiaries of a foreign bank

- Banks (public sector)

20% (FDI and portfolio)/Government

Subject to Banking Companies (Acquisition and Transfer of Undertakings) Act 1970 and 1980

- Commodity exchanges

49% (FDI and FII)-FDI investment limit 26% and FII/FPIs registered under the Portfolio Investment Scheme to 23%/automatic

Subject to the Forward Contracts (Regulation) Act, 1952

- Credit information companies

74% (FDI + FII/FPI)/automatic

Subject to Credit Information Companies (Regulation) Act, 2005

- Infrastructure companies in Securities Market

49% (FDI + FII)(FDI up to 26% and FII up to 23%)/automatic

FIIs can invest only through purchases in the secondary market

- Insurance:

(i) insurance company; (ii) insurance brokers; (iii) third-party administrators; and (iv) surveyors and loss assessors

49% (FDI + FII/FPI + NRI)/automatic

Licence required from the Insurance Regulatory and Development Authority

- Non-banking finance companies (NBFCs)

(i) merchant banking; (ii) under writing; (iii) portfolio management services; (iv) investment advisory services; (v) financial consultancy; (vi) stock broking; (vii) asset management; (viii) venture capital; (ix) custodian service; (x) factoring; (xi) credit rating agencies; (xii) leasing and finance; (xiii) housing finance; (xiv) foreign exchange broking; (xv) credit card business; (xvi) money changing business;

(xvii) micro credit; and (xviii) rural credit


Transport services

Civil aviation

- airports (greenfield projects)


- airports (existing projects)

100%/automatic up to 74%; Government approval for equity above 74%

Air transport services

- scheduled air transport services/domestic scheduled passenger airline


100% for NRIs/automatic

Foreign airlines may invest in the capital of companies operating cargo airlines, helicopter and seaplane services; foreign airlines may also invest in the capital of Indian companies (but not Air India) operating scheduled and non scheduled air transport services subject to compliance with domestic regulations

- non-scheduled air transport services

74% (100% for NRIs) (Government approval required for equity above 49%)

- helicopter services/seaplane services requiring DGCA approval


Other civil aviation services

- ground handling services subject to sectoral regulations and security clearance

74% (100% for NRIs) (Government approval required for equity above 49%)

- Maintenance and repair organizations; flying training institutes; and technical training institutions


Railway infrastructure

Construction, operation and maintenance of the following:

(i) suburban corridor projects through PPP, (ii) high speed train projects, (iii) dedicated freight lines, (iv) rolling stock including train sets, and locomotive/coaches manufacturing and maintenance facilities, (v) railway electrification, (vi) signaling systems, (vii) freight terminals, (viii) passenger terminals, (ix) infrastructure in industrial park pertaining to railway line/sidings including electrified railway lines and connectivities to main railway line and (x) mass rapid transport systems


Automatic subject to structural guidelines of Ministry of Railways, proposals for FDI above 49% in sensitive areas subject to consideration by Cabinet Committee on Security on case-by-case basis

Construction services

- Townships, housing, built up infrastructure and construction-development projects (including but not restricted to housing, commercial premises, hotels, resorts, hospitals, educational institutions, recreational facilities, city and regional infrastructure)


Subject to minimum area, capitalization requirements and repatriation limits for original investment for three years; FDI is not permitted in real estate

Industrial parks


Private security agencies


Distribution services


- cash and carry wholesale trading (including sourcing from SMEs)


Subject to licences/registration/permits as specified under relevant State government legislation

- e-commerce activities


- test marketing


- Single brand product retail trading

100%/automatic up to 49%. Government approval required above 49%

FDI above 51% subject to sourcing of 30% of the value of goods purchased from India, preferably from medium and small enterprises, village and cottage industries, artisans and craftsmen

- multi brand retail trading


Minimum FDI of US$100 million at least 50% of which to be invested in backend infrastructure; at least 30% of the value of procurement of manufactured/processed products to be sourced from Indian small industries with total investment in plant and machinery not exceeding US$1 million

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