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Government raised FDI limit in seven sectors
January 31, 2008: The government has raised foreign direct investment (FDI) in seven key economic sectors, including non-scheduled airlines and credit information companies and MRO.
The FDI review policy, approved by the Cabinet allows 74 per cent FDI in non-scheduled airlines, 49 per cent in commodity exchanges and up to 49 per cent in credit information companies. The policy also increased the FDI equity cap from 26 to 49 per cent (with prior FIPB approval) in petroleum refining by PSUs and 100 per cent in titanium mining.
In case of aviation, the existing 100 per cent FDI cap has been retained at 49 per cent automatic route and 100 per cent for NRIs, subject to no direct or indirect participation by foreign airlines in domestic scheduled passenger airlines.
However, the policy proposed a liberal FDI regime of up to 100 per cent on the automatic route for maintenance and repair organisations, flying training institutes; technical training institutions and helicopter services/sea plane services. In case of CICs, the 49 per cent FDI cap would be subject to government approval and RBI clearance.
It has been proposed that a sub-cap of 24 per cent (within 49 per cent FDI cap) would be available for FII investment in CICs listed on stock exchanges. The policy has also clarified that provisions of Press Note 2 (2005) will not apply to industrial parks and FII investments in construction development projects would not be governed.
Source: Economic Times