The Department of Industrial Policy and Promotion (DIPP) has unveiled the new consolidated foreign direct investment (FDI) policy effective from 05 April 2013. The New FDI Policy supersedes the earlier version of the consolidated FDI policy of 2012 and also the press notes that were issued by DIPP prior to 05 April 2013.

As per new policy, 51 per cent FDI in multi brand retail sector will be allowed with government approval. However, the policy mandates some conditions have to be fulfilled before applying to the DIPP.

In the case of Asset Reconstruction Companies (ARCs), the ceiling limit for FDI in ARCs has been increased to 74 per cent from 49 per cent with government approval. The new policy permits 49 per cent (FDI & FII) in Power Exchanges registered under the Central Electricity Regulatory Commission (Power Market) Regulations, 2010 will be permitted after government approval (for FDI).

In the Broadcasting Sector, FDI cap has been raised to 74 per cent in various services such as Direct to Home services and Cable Networks (Multi System operators (MSOs) operating at National or State or District level and undertaking upgradation of networks towards digitalization and addressability). Investment upto 49 per cent will be allowed in the automatic route whereas for investment beyond 49 per cent, approval of the government will be required.

As per the new policy, NBFCs having foreign investment more than 75 per cent and up to 100 per cent, and with a minimum capitalisation of US$ 50 million, can set up step down subsidiaries for specific NBFC activities, without any restriction on the number of operating subsidiaries and without bringing in additional capital. Foreign Capital participation in LLPs will be allowed only by way of cash consideration, received by inward remittance, through normal banking channels or by debit to NRE/FCNR account of the person concerned, maintained with an authorized dealer/authorized bank.