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Government allows 100% FDI in single-brand retail Government allows 100% FDI in single-brand retail

Government allows 100% FDI in single-brand retail

Jan 11, 2018

In a major boost to economic reforms, Government allows 100% FDI in single-brand retail via automatic route; also clears 49% FDI in Air India under approval route; foreign investment norms also eased for construction sector.

Union Cabinet on Wednesday gave its approval to a number of amendments in the Foreign Direct Investment Policy. These are intended to liberalize and simplify the FDI policy so as to provide ease of doing business in the country. It will lead to larger FDI inflows contributing to growth of investment, income and employment.

Union Cabinet chaired by Prime Minister Narendra Modi gave its approval to a number of amendments in FDI Policy.

Decisions are intended to liberalise and simplify FDI policy so as to provide ease of doing business. This will also lead to larger FDI inflows contributing to growth of investment, income and employment.

Boost to FDI Policy Liberalisation of FDI policy includes

--100% FDI under automatic route for Single Brand Retail Trading

--Foreign airlines allowed to invest up to 49 per cent under approval route in Air India

--100 per cent FDI under automatic route in Construction Development

At present, FDI policy on Single Brand Retail Trading (SBRT) allows 49 per cent FDI under automatic route, and FDI beyond 49 per cent and up to 100 per cent through Government approval route. Now government has decided to permit 100 per cent FDI under automatic route for SBRT.

The relaxation of norms for foreign airline investment in Air India has been given but with riders. Foreign investment in Air India including that of foreign Airline (s) shall not exceed 49 per cent either directly or indirectly -- and "substantial ownership and effective control of Air India shall continue to be vested in Indian National".

According to the current FDI policy, foreign airlines are allowed to invest under government approval route in Indian companies operating scheduled and non-scheduled air transport services, up to the limit of 49 per cent of their paid-up capital. But the provision was not applicable to Air India.

Cabinet clarified that real-estate broking service does not amount to real estate business and is therefore, eligible for 100 per cent FDI under automatic route.

These key & timely decisions have come ahead of Prime Minister Modi's visit to Davos to attend annual meeting of the World Economic Forum in Davos. Prime Minister will deliver the keynote address at the plenary session. He will also address the heads of world's top companies and invite them to invest in India.

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