Govt approves 100% FDI in airports
In a major push to flagging economic reforms programme, Govt okayed 100% foreign equity in many sectors.india Updated: Jan 25, 2006 11:36 IST
In a major push to the flagging economic reforms programme, India on Tuesday approved 100 per cent foreign equity in several industries and permitted 51 per cent foreign investment in retail trade for single brand products.
"This is for the first time in 15 years that the whole foreign direct investment (FDI) policy has been reviewed in an integrated manner to remove anomalies and inconsistencies," Commerce Minister Kamal Nath said after a cabinet meeting chaired by Prime Minister Manmohan Singh took these decisions.
The decision on the retail sector means that global brands like Amway, McDonald's and Pizza Hut will be able to enter India on their own steam. They currently operate through franchisees.
The Left had reservations about opening the retail sector to FDI and the government now seems to have taken the middle ground to please overseas companies that want to open shop in India.
The cabinet also decided that FDI up to 100 per cent would be allowed automatically for new airports, liquefied natural gas (LNG) pipelines, and for market studies and investments in petroleum, Kamal Nath said.
Up to 100 per cent FDI in the exploration of diamonds and other precious stones too will be allowed under the automatic route.
The cabinet allowed up to 100 per cent FDI under the automatic route for processing and warehousing in the coffee industry and power trading, subject to the provision of the electricity act.
The FDI limit for captive mining of coal and lignite too would be raised to 100 per cent, Kamal Nath said.
"This is not so much an enterprise to revise caps as to simplify and rationalise the procedures," he maintained.
"The guiding principle is that for some items requiring industrial licences, which are in any case well-regulated, there is no need for a second tier Foreign Investment Promotion Board so these can be put on the automatic route," he said.