In a significant development, the Narendra Modi-led government at the Centre on Monday radically liberalised the FDI regime by permitting 100 per cent foreign direct investment under government approval route for almost every sector, including defence.
“With these changes, India is now the most open economy in the world for FDI,” said a Commerce Ministry statement.
The latest policy change means the defence sector is now completely open for foreign direct investment through government approval route. The condition of access to “state-of-art” technology in the country has been removed too.
The Cabinet also permitted 100 per cent FDI in civil aviation, animal husbandry and trading, including through e-commerce, in respect of food products manufactured or produced in India.
The government has also relaxed local sourcing norms up to three years and a relaxed sourcing regime for another five years for firms undertaking Single Brand Retail Trading of products having “state-of-art” and “cutting edge” technology.
“We will inform Apple to indicate whether they would like to avail the new provisions,” DIPP Secretary Ramesh Abhishek said, while briefing the media at Udyog Bhavan in New Delhi.
It is to be noted that Apple had applied for exemption from 30 per cent local sourcing norm. The FDI policy on broadcasting carriage services has also been amended to enable 100 per cent FDI in teleports, DTH, Cable Networks, mobile TVs, and Headend-in-the Sky Broadcasting Service.
But the FDI remains prohibited in lottery, gambling, atomic energy, real estate and Real Estate Investments Trusts (REIT) and railways operations.
The extant FDI policy on pharma sector provides for 100% FDI under automatic route in greenfield pharma and FDI up to 100 per cent under government approval in brownfield pharma.