FDI review to be put off by a month
Foreign companies eyeing the country's buoyant markets in a host of sectors such as retail would have to wait a little longer as the government has decided to postpone changes in FDI norms by about a month.business Updated:
Foreign companies eyeing the country's buoyant markets in a host of sectors such as retail would have to wait a little longer as the government has decided to postpone changes in FDI norms by about a month.
The annual review in the Foreign Direct Investment policy are due this month but it has now been decided to postpone the exercise as Parliament is in session. The review will come up when Parliament is in recess, official sources said.
Parliament goes into recess from March 21 and will meet again on April 18.
According to reports, the government is likely to allow foreign investors to pick stake in commodity exchanges and change norms and caps for aviation, petroleum and retail.
However, in view of the political opposition, especially in the retail sector, the government is extra-cautious.
In the review, the government could also liberalise FDI norms in Asset Reconstruction Companies, where the limit currently stands at 49 per cent through Foreign Investment Promotion Board approval. In the banking sector, the cap on voting rights is also likely to be reviewed.
In petroleum, the dilution of condition that 26 per cent of the equity must be divested in favour of Indian entities in five years could be a part of the changes.
In aviation, the proposal is to set a separate head of Air Traffic Services. The government will define what constitutes these services and whether they should have different FDI rules and limits.
At present, every aviation activity apart from airports and airlines falls in this category and includes areas like charter and helicopter services and ground handling.