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Union of India - Section

Section 16 in Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017

16. Permitted sectors, entry routes and sectoral caps for total foreign investment.

- Unless otherwise specified in these Regulations or the relevant Schedules the entry routes and sectoral caps for the total foreign investment in an Indian entity shall be as follows:A. Entry Routes
(1)Automatic Route means the entry route through which investment by a person resident outside India does not require the prior Reserve Bank approval or Government approval.
(2)Government Route means the entry route through which investment by a person resident outside India requires prior Government approval. Foreign investment received under this route shall be in accordance with the conditions stipulated by the Government in its approval.
(3)Aggregate Foreign Portfolio Investment up to 49 percent of the paid-up capital on a fully diluted basis or the sectoral/ statutory cap, whichever is lower, will not require Government approval or compliance of sectoral conditions as the case may be, if such investment does not result in transfer of ownership and control of the resident Indian company from resident Indian citizens or transfer of ownership or control to persons resident outside India. Other investments by a person resident outside India will be subject to conditions of Government approval and compliance of sectoral conditions as laid down in these regulations.B. Sectoral CapsSector-Specific Policy for Total Foreign Investment
(1)Sectoral cap for the following sectors/ activities is the limit indicated against each sector. The total foreign investment shall not exceed the sectoral/ statutory cap.
(2)Foreign investment in the following sectors/ activities is, subject to applicable laws/ regulations, security and other conditionalities
(3)In sectors/ activities not listed below or not prohibited under regulation 15 of these Regulations, foreign investment is permitted up to 100 percent on the automatic route, subject to applicable laws/ regulations, security and other conditionalities.Provided foreign investment in financial services other than those indicated under serial number "F" below would require prior Government approval.
(4)Wherever there is a requirement of minimum capitalization, it shall include premium received along with the face value of the capital instrument, only when it is received by the company upon issue of such instruments to the person resident outside India. Amount paid by the transferee during post-issue transfer beyond the issue price of the capital instrument, cannot be taken into account while calculating minimum capitalization requirement.
(5)[ (a) Foreign Investment in investing companies not registered as Non-Banking Financial Companies with the Reserve Bank and in core investment companies (CICs), both engaged in the activity of investing in the capital of other Indian entities, will require prior Government approval. [Substituted by Notification No. G.S.R. 279(E), dated 26.3.2018 (w.e.f. 7.11.2017).]Note: Compliance to these Regulations by the core investment companies is in addition to the compliance of the regulatory framework prescribed to such companies as NBFCs under the Reserve Bank of India Act, 1934 and regulations framed thereunder.
(b)Foreign investment in investing companies registered as Non-Banking Financial Companies (NBFCs) with the Reserve Bank, will be under 100% automatic route.]
(6)For undertaking activities which are under automatic route and without FDI linked performance conditions, an Indian company which does not have any operations and also has not made any downstream investment, may receive investment in its capital instruments from persons resident outside India under automatic route. However, approval of the Government will be required for such companies for undertaking activities which are under Government route. As and when such a company commences business or makes downstream investment, it will have to comply with the relevant sectoral conditions on entry route, conditionalities and caps.
(7)The onus of compliance with the sectoral/ statutory caps on such foreign investment and attendant conditions, if any, shall be on the company receiving foreign investment.
(8)[ Wherever the person resident outside India who has made foreign investment specifies a particular auditor/ audit firm having international network for the audit of the Indian investee company, then audit of such investee company shall be carried out as joint audit wherein one of the auditors is not part of the same network.] [Inserted by Notification No. G.S.R. 279(E), dated 26.3.2018 (w.e.f. 7.11.2017).]
Sl. No Sector/ Activity Sectoral Cap Entry Route
1. Agriculture & Animal Husbandry    
1.1 (a) Floriculture,Horticulture and Cultivation of vegetables & mushrooms undercontrolled conditions;(b) Development andproduction of seeds and planting material;(c) Animal Husbandry(including breeding of dogs), Pisciculture, Aquaculture andApiculture; and(d) Services related toagro and allied sectors.Note: Other than the above, foreign investmentis not allowed in any other agricultural sector/ activity. 100% Automatic
1.2 Other Conditions    
  The term 'undercontrolled conditions' covers the following:'Cultivation under controlled conditions' for thecategories of Floriculture, Horticulture, Cultivation ofvegetables and Mushrooms is the practice of cultivation whereinrainfall, temperature, solar radiation, air humidity and culturemedium are controlled artificially. Control in these parametersmay be effected through protected cultivation under green houses,net houses, poly houses or any other improved infrastructurefacilities where micro-climatic conditions are regulatedanthropogenically.
2. Plantation    
2.1 (a) Tea sector includingtea plantations(b) Coffee plantations(c) Rubber plantations(d) Cardamom plantations(e) Palm oil treeplantations(f) Olive oil treeplantationNote: Foreign investment is not allowed in anyplantation sector/ activity other than those listed above. 100% Automatic
2.2 Other Conditions    
  Prior approval of the State Government concerned isrequired in case of any future land use change.
3. Mining    
3.1 Mining and Exploration of metal and non-metal oresincluding diamond, gold, silver and precious ores but excludingtitanium bearing minerals and its ores; subject to the Mines andMinerals (Development & Regulation) Act, 1957. 100% Automatic
3.2 Coal and Lignite    
  (a) Coal & Lignitemining for captive consumption by power projects, iron &steel and cement units and other eligible activities permittedunder and subject to the provisions of Coal Mines(Nationalization) Act, 1973.(b) Setting up coal processing plants likewasheries, subject to the condition that the company shall not docoal mining and shall not sell washed coal or sized coal from itscoal processing plants in the open market and shall supply thewashed or sized coal to those parties who are supplying raw coalto coal processing plants for washing or sizing. 100% Automatic
3.3 Mining and mineral separation of titaniumbearing minerals and ores, its value addition and integratedactivities
  (a) Mining and mineral separation of titaniumbearing minerals & ores, its value addition and integratedactivities subject to sectoral regulations and the Mines andMinerals (Development and Regulation) Act, 1957. 100% Government
3.4 Other Conditions    
  (a) Foreign investmentfor separation of titanium bearing minerals & ores will besubject to the following conditions:(i) Value additionfacilities are set up within India along with transfer oftechnology;(ii) Disposal oftailings during the mineral separation shall be carried out inaccordance with regulations framed by the Atomic EnergyRegulatory Board such as Atomic Energy (Radiation Protection)Rules, 2004 and the Atomic Energy (Safe Disposal of RadioactiveWastes) Rules, 1987.(b) Foreign investmentwill not be allowed in mining of "prescribed substances"listed in the Notification No. S.O. 61(E), dated 18.1.2006,issued by the Department of Atomic Energy.Clarification:(i) For titanium bearingores such as Ilmenite, Leucoxene and Rutile, manufacture oftitanium dioxide pigment and titanium sponge constitutes valueaddition. Ilmenite can be processed to produce Synthetic Rutileor Titanium Slag as an intermediate value added product.(ii) The objective is to ensure that the rawmaterial available in the country is utilized for setting updownstream industries and the technology availableinternationally is also made available for setting up suchindustries within the country. Thus, if with the technologytransfer, the objective of this regulation can be achieved, theconditions prescribed at (a)(i) above shall be deemed to befulfilled.
4. Petroleum & Natural Gas
4.1 Exploration activities of oil and natural gasfields, infrastructure related to marketing of petroleum productsand natural gas, marketing of natural gas and petroleum products,petroleum product pipelines, natural gas/ pipelines, LNGRegasification infrastructure, market study and formulation andPetroleum refining in the private sector, subject to the existingsectoral policy and regulatory framework in the oil marketingsector and the policy of the Government on private participationin exploration of oil and the discovered fields of national oilcompanies. 100% Automatic
4.2 Petroleum refining by the Public SectorUndertakings (PSUs), without any disinvestment or dilution ofdomestic equity in the existing PSUs. 49% Automatic
5. Manufacturing 100% Automatic
5.1 A manufacturer ispermitted to sell its products manufactured in India throughwholesale and/ or retail, including through e-commerce withoutGovernment approval.Notwithstanding the provisions of these regulationson trading sector, 100 percent foreign investment underGovernment approval route is allowed for trading, includingthrough e-commerce, in respect of food products manufactured and/or produced in India. Applications for foreign investment in foodproducts retail trading would be processed in the Department ofIndustrial Policy & Promotion before being considered by theGovernment for approval.
6. Defence    
6.1 Defence Industry subjectto Industrial license under the Industries (Development &Regulation) Act, 1951; andManufacturing of small arms and ammunition underthe Arms Act, 1959 100% Automatic route up to 49% Government route beyond49% wherever it is likely to result in access to moderntechnology or for other reasons to be recorded.
6.2 Other Conditions
  (a) Fresh foreigninvestment within the permitted automatic route, in a company notseeking industrial license, resulting in change in the ownershippattern or transfer of stake by existing investor to new foreigninvestor, will require Government approval.(b) Licence applicationswill be considered and licences will be given by the Departmentof Industrial Policy & Promotion, Ministry of Commerce &Industry, in consultation with Ministry of Defence and Ministryof External Affairs.(c) Foreign investmentin this sector is subject to security clearance and guidelines ofthe Ministry of Defence.(d) Investee company should be structured to beself-sufficient in areas of product design and development. Theinvestee/ joint venture company along with manufacturingfacility, should also have maintenance and life cycle supportfacility of the product being manufactured in India.
7. Broadcasting    
7.1 Broadcasting Carriage Services    
7.1.1 (a) Teleports (settingup of up-linking HUBs/ Teleports);(b) Direct to Home(DTH);(c) Cable Networks(Multi System Operators (MSOs) operating at National or State orDistrict level and undertaking up-gradation of networks towardsdigitalization and addressability);(d) Mobile TV;(e) Head-end-in-the Sky Broadcasting Service (HITS) 100% Automatic
7.1.2 Cable Networks (Other MSOs not undertakingup-gradation of networks towards digitalization andaddressability and Local Cable Operators (LCOs)). 100% Automatic
7.1.3 Note: Infusion of fresh foreign investment forsectors specified in 7.1.1 and 7.1.2 above, beyond 49 percent ina company not seeking license/ permission from sectoral Ministry,resulting in change in the ownership pattern or transfer of stakeby existing investor to new foreign investor, will requireGovernment approval
7.2 Broadcasting Content Services    
7.2.1 Terrestrial Broadcasting FM (FM Radio), subject tosuch terms and conditions, as specified from time to time, byMinistry of Information and Broadcasting, for grant of permissionfor setting up of FM Radio stations. 49% Government
7.2.2 Up-Linking of 'News & Current Affairs' TVChannels 49% Government
7.2.3 Up-linking of Non-'News & Current Affairs' TVChannels/ Down-linking of TV Channels 100% Automatic
7.3 Other Conditions    
  (a) Foreign investmentin companies engaged in all the afore-stated services will besubject to relevant regulations and such terms and conditions, asmay be specified from time to time, by the Ministry ofInformation and Broadcasting.(b) Foreign investmentin the afore-stated broadcasting carriage services will besubject to the terms and conditions as may be specified by theMinistry of Information and Broadcasting, from time to time, inthis regard.(c) Licensee shallensure that broadcasting service installation carried out by itshould not become a safety hazard and is not in contravention ofany statute, rule or regulations and public policy.(d) In the l& Bsector where the sectoral cap is up to 49 percent, the companyshould be owned and controlled by resident Indian citizens orIndian companies which are owned and controlled by residentIndian citizens.(i) For this purpose,the equity held by the largest Indian shareholder shall be atleast 51 percent of the total equity, excluding the equity heldby Public Sector Banks and Public Financial Institutions, asdefined in Section 4A of the Companies Act, 1956 or Section 2(72) of the Companies Act, 2013, as the case may be. The term`largest Indian shareholder' used in this clause, will includeany or a combination of the following:(1) In the case of anindividual shareholder,(aa) The individualshareholder,(bb) A relative of theshareholder within the meaning of Section 2 (77) of CompaniesAct, 2013.(cc) A company/group ofcompanies in which the individual shareholder/HUF to which hebelongs has management and controlling interest.(2) In the case of anIndian company,(aa) The Indian company(bb) A group of Indiancompanies under the same management and ownership control.(3) For this purpose,"Indian company" shall be a company which must have aresident Indian or a relative as defined under Section 2 (77) ofCompanies Act, 2013/ HUF, either singly or in combination holdingat least 51percent of the shares.(4) Provided that, in case of a combination of allor any of the entities mentioned in Sub-Clauses (d)(i) above,each of the parties shall have entered into a legally bindingagreement to act as a single unit in managing the matters of theapplicant company
8. Print Media    
8.1 Publishing of newspaper and periodicals dealingwith news and current affairs 26% Government
8.2 Publication of Indian editions of foreign magazinesdealing with news and current affairs 26% Government
8.2.1 Other conditions    
  (a) 'Magazine', for thepurpose of these guidelines, will be defined as a periodicalpublication, brought out on non-daily basis, containing publicnews or comments on public news.(b) Foreign investment shall also be subject to theGuidelines for Publication of Indian editions of foreignmagazines dealing with news and current affairs issued by theMinistry of Information & Broadcasting on 4-12-2008.
8.3 Publishing/ printing of Scientific and TechnicalMagazines/ specialty journals/periodicals, subject to compliancewith the legal framework as applicable and guidelines issued inthis regard from time to time by Ministry of Information andBroadcasting. 100% Government
8.4 Publication of facsimile edition of foreignnewspapers 100% Government
8.4.1 Other conditions:    
  (a) Foreign investmentshould be made by the owner of the original foreign newspaperswhose facsimile edition is proposed to be brought out in India.(b) Publication offacsimile edition of foreign newspapers can be undertaken only byan entity incorporated or registered in India under theprovisions of the Companies Act, 2013.(c) Publication of facsimile edition of foreignnewspaper would also be subject to the Guidelines for publicationof newspapers and periodicals dealing with news and currentaffairs and publication of facsimile edition of foreignnewspapers issued by Ministry of Information & Broadcastingon 31-3-2006.
9. Civil Aviation
9.1 The Civil Aviationsector includes Airports, Scheduled and Non-Scheduled domesticpassenger airlines, Helicopter services/ Seaplane services,Ground Handling Services, Maintenance and Repair organizations,Flying training institutes, and Technical training institutions.For the purposes ofthe Civil Aviation sector:(a) "Airport"means a landing and taking off area for aircrafts, usually withrunways and aircraft maintenance and passenger facilities andincludes aerodrome as defined in clause (2) of section 2 of theAircraft Act, 1934;(b) "Aerodrome"means any definite or limited ground or water area intended to beused, either wholly or in part, for the landing or departure ofaircraft, and includes all buildings, sheds, vessels, piers andother structures thereon or pertaining thereto;(c) "Air transportservice" means a service for the transport by air ofpersons, mails or any other thing, animate or inanimate, for anykind of remuneration whatsoever, whether such service consists ofa single flight or series of flights;(d) "Air TransportUndertaking" means an undertaking whose business includesthe carriage by air of passengers or cargo for hire or reward;(e) "Aircraftcomponent" means any part, the soundness and correctfunctioning of which, when fitted to an aircraft, is essential tothe continued airworthiness or safety of the aircraft andincludes any item of equipment;(f) "Helicopter"means a heavier than air aircraft supported in flight by thereactions of the air on one or more power driven rotors onsubstantially vertical axis;(g) "Scheduled airtransport service" means an air transport service undertakenbetween the same two or more places and operated according to apublished time table or with flights so regular or frequent thatthey constitute a recognizably systematic series, each flightbeing open to use by members of the public;(h) "Non-Scheduledair transport service" means any service which is not ascheduled air transport service and will include Cargo airlines;(i) "Cargoairlines" would mean such airlines which meet the conditionsas given in the Civil Aviation Requirements issued by theMinistry of Civil Aviation;(j) "Seaplane"means an aeroplane capable normally of taking off from andalighting solely on water;(k) "Ground Handling" means (i) ramphandling, (ii) traffic handling both of which shall include theactivities as specified by the Ministry of Civil Aviation throughthe Aeronautical Information Circulars from time to time, and(iii) any other activity specified by the Central Government tobe a part of either ramp handling or traffic handling.
9.2 Airports    
  (a) Greenfield projects 100% Automatic
  (b) Existing projects 100% Automatic
9.3 Air Transport Services    
  (a) [ (i) Scheduled Air Transport Service/ Domestic Scheduled Passenger Airline(ii) Regional Air Transport Service [Substituted by Notification No. G.S.R. 279(E), dated 26.3.2018 (w.e.f. 7.11.2017).] 100% Automatic up to 49%Government route beyond 49%(Automatic up to 100% for NRIs and OCIs)]
  (b) Non-Scheduled Air Transport Service 100% Automatic
  (c) Helicopter services/ seaplane servicesrequiring DGCA approval 100% Automatic
9.4 Other Services under Civil Aviation sector    
  (a) Ground Handling Services subject to sectoralregulations and security clearance 100% Automatic
  (b) Maintenance and Repair organizations; flyingtraining institutes and technical training institutions 100% Automatic
9.5 Other Conditions    
  (a) Air TransportServices would include Domestic Scheduled Passenger Airlines,Non-Scheduled Air Transport Services, helicopter and seaplaneservices.(b) Foreign airlines areallowed to make foreign investment in Cargo airlines, helicopterand seaplane services, as per the limits and entry routesmentioned above.(c) Foreign airlines areallowed to invest in the capital of Indian companies, operatingscheduled and nonscheduled air transport, services up to thelimit 49 percent of the paid up capital of the Indian investeecompany. Such foreign investment would be subject to thefollowing conditions:(i) It shall be underthe Government approval route.(ii) The foreigninvestment shall comply with the relevant regulations ofSecurities and Exchange Board of India as well as otherapplicable rules and regulations.(iii) A ScheduledOperator's Permit can be granted only to a company:a. (1) that isregistered and has its principal place of business within India;b. (2) the Chairman andat least two-thirds of the Directors of which are citizens ofIndia; andc. (3) the substantialownership and effective control of which is vested in Indiancitizens.(iv) All foreignnationals likely to be associated with Indian scheduled andnon-scheduled air transport services, as a result of such foreigninvestment shall be cleared from security view point beforedeployment; and(v) All technicalequipment that might be imported into India as a result of suchforeign investment shall require clearance from the relevantauthority in the Ministry of Civil Aviation.[(d) In addition to the above conditions, foreign investment in M/s Air India Limited shall be subject to the following conditions:(i) Foreign investment in M/s Air India Ltd., including that of foreign airline(s), shall not exceed 49% either directly or indirectly.(ii) Substantial ownership and effective control of M/s Air India Ltd. shall continue to be vested in Indian Nationals] [Inserted by Notification No. G.S.R. 279(E), dated 26.3.2018 (w.e.f. 7.11.2017).]Note:(1) The sectoral caps/entry routes, mentioned at paragraph 9.3(a) and 9.3(b) above, areapplicable in the situation where there is no investment byforeign airlines.(2) The dispensation forNRIs and OCIs regarding foreign investment up to 100% shall alsobe applicable in respect of the investment regime specified at9.5(c) above.[(3) ***] [Omitted by Notification No. G.S.R. 279(E), dated 26.3.2018 (w.e.f. 7.11.2017).](4) The investee company additionally shall have tofollow guidelines issued by the concerned ministry of the CentralGovernment.
10 Construction Development: Townships, Housing,Built-up infrastructure    
10.1 Construction-development projects (which wouldinclude development of townships, construction ofresidential/commercial premises, roads or bridges, hotels,resorts, hospitals, educational institutions, recreationalfacilities, city and regional level infrastructure, townships) 100% Automatic
10.2 Other Conditions    
10.2 (a) Each phase of theconstruction development project would be considered as aseparate project.(b) The investor will bepermitted to exit on completion of the project or afterdevelopment of trunk infrastructure i.e. roads, water supply,street lighting, drainage and sewerage.(c) Notwithstandinganything contained at (b) above, a person resident outside Indiawill be permitted to exit and repatriate foreign investmentbefore the completion of project under automatic route, providedthat a lock-in-period of three years, calculated with referenceto each tranche of foreign investment has been completed.Further, transfer of stake from a person resident outside Indiato another person resident outside India, without repatriation offoreign investment will neither be subject to any lock-in periodnor to any government approval.(d) The project shallconform to the norms and standards, including land userequirements and provision of community amenities and commonfacilities, as laid down in the applicable building controlregulations, bye-laws, rules, and other regulations of the StateGovernment/ Municipal/ Local Body concerned.(e) The Indian investeecompany will be permitted to sell only developed plots. For thepurposes of this policy "developed plots" will meanplots where trunk infrastructure i.e. roads, water supply, streetlighting, drainage and sewerage, have been made available.(f) The Indian investeecompany shall be responsible for obtaining all necessaryapprovals, including those of the building/ layout plans,developing internal and peripheral areas and other infrastructurefacilities, payment of development, external development andother charges and complying with all other requirements asprescribed under applicable rules/ bye-Laws/ regulations of theState Government/ Municipal/ Local Body concerned.(g) The StateGovernment/ Municipal/ Local Body concerned, which approves thebuilding/ development plans, will monitor compliance of the aboveconditions by the developer.Note:(1) Foreign investmentis not permitted in an entity which is engaged or proposes toengage in real estate business, construction of farm houses andtrading in transferable development rights (TDRs).(2) Condition of lock-inperiod will not apply to Hotels and Tourist Resorts, Hospitals,Special Economic Zones (SEZs), Educational Institutions, Old AgeHomes and investment by NRIs/ OCIs.(3) Completion of theproject will be determined as per the local bye-laws/ rules andother regulations of State Governments.(4) Foreign investmentup to 100 percent under automatic route is permitted in completedprojects for operating and managing townships, malls/ shoppingcomplexes and business centres. Consequent to such foreigninvestment, transfer of ownership and/ or control of the investeecompany from persons resident in India to persons residentoutside India is also permitted. However, there would be alock-in-period of three years, calculated with reference to eachtranche of foreign investment and transfer of immovable propertyor part thereof is not permitted during this period.(5) "Transfer",in relation to this sector, includes,-a. the sale, exchange orrelinquishment of the asset; orb. the extinguishment ofany rights therein; orc. the compulsoryacquisition thereof under any law; ord. any transactioninvolving the allowing of the possession of any immovableproperty to be taken or retained in part performance of acontract of the nature referred to in section 53A of the Transferof Property Act, 1882 (4 of 1882) ; ore. any transaction, byacquiring capital instruments in a company or by way of anyagreement or any arrangement or in any other manner whatsoever,which has the effect of transferring, or enabling the enjoymentof, any immovable property.(6) Real estatebusiness' means dealing in land and immovable property with aview to earning profit therefrom and does not include developmentof townships, construction of residential/ commercial premises,roads or bridges, educational institutions, recreationalfacilities, city and regional level infrastructure, townships;[(7) Real estate broking services shall be excluded from the definition of "real estate business" and 100% foreign investment is allowed in real estate broking services under automatic route] [Inserted by Notification No. G.S.R. 279(E), dated 26.3.2018 (w.e.f. 7.11.2017).]Explanation:a. Investment in unitsof Real Estate Investment Trusts (REITs) registered and regulatedunder the Securities and Exchange Board of India (REITs)regulations 2014 shall also be excluded from the definition of"real estate business".b. Earning of rentincome on lease of the property, not amounting to transfer, willnot amount to real estate business.c. Transfer in relationto real estate includes,(i) the sale, exchangeor relinquishment of the asset; or(ii) the extinguishmentof any rights therein; or(iii) the compulsoryacquisition thereof under any law; or(iv) any transactioninvolving the allowing of the possession of any immovableproperty to be taken or retained in part performance of acontract of the nature referred to in section 53A of the Transferof Property Act, 1882 (4 of 1882); or(v) any transaction, by acquiring capitalinstruments in a company or by way of any agreement or anyarrangement or in any other manner whatsoever, which has theeffect of transferring, or enabling the enjoyment of, anyimmovable property.
11. Industrial Parks 100% Automatic
11.1 For the purpose of thissector:(a) "IndustrialPark" is a project in which quality infrastructure in theform of plots of developed land or built up space or acombination with common facilities, is developed and madeavailable to all the allottee units for the purposes ofindustrial activity.(b) "Infrastructure"refers to facilities required for functioning of units located inthe Industrial Park and includes roads (including approachroads), railway line/ sidings including electrified railway linesand connectivity to the main railway line, water supply andsewerage, common effluent treatment facility, telecom network,generation and distribution of power, air conditioning.(c) "CommonFacilities" refer to the facilities available for all theunits located in the industrial park, and include facilities ofpower, roads (including approach roads), railway line/ sidingsincluding electrified railway lines and connectivity to the mainrailway line, water supply and sewerage, common effluenttreatment, common testing, telecom services, air conditioning,common facility buildings, industrial canteens, convention/conference halls, parking, travel desks, security service, firstaid centre, ambulance and other safety services, trainingfacilities and such other facilities meant for common use of theunits located in the Industrial Park.(d) "Allocablearea" in the Industrial Park means-(i) in the case of plotsof developed land - the net site area available for allocation tothe units, excluding the area for common facilities.(ii) in the case ofbuilt up space - the floor area and built-up space utilized forproviding common facilities.(iii) in the case of acombination of developed land and built-up space - the net siteand floor area available for allocation to the units excludingthe site area and built-up space utilized for providing commonfacilities.(e) "Industrial Activity" meansmanufacturing; electricity; gas and water supply; post andtelecommunications; software publishing, consultancy and supply;data processing, database activities and distribution ofelectronic content; other computer related activities; basic andapplied research and development on bio-technology,pharmaceutical sciences/ life sciences, natural sciences andengineering; business and management consultancy activities; andarchitectural, engineering and other technical activities.
11.2 Foreign investment inIndustrial Parks would not be subject to the conditionalitiesapplicable for construction development projects etc. spelt outin para 10 above, provided the Industrial Parks meet with theunder-mentioned conditions:(a) it would comprise ofa minimum of 10 units and no single unit shall occupy more than50 percent of the allocable area;(b) the minimum percentage of the area to beallocated for industrial activity shall not be less than 66percent of the total allocable area.
12. Satellites - Establishment and operation    
  Satellites Establishment and operation, subject tothe sectoral guidelines of Department of Space/ ISRO 100% Government
13. Private Security Agencies 49% Government
14. Telecom services (including TelecomInfrastructure Providers Category-l)    
14.1 All telecom services including TelecomInfrastructure Providers Category-I, viz. Basic, Cellular, UnitedAccess Services, Unified license (Access services), UnifiedLicense, National/ International Long Distance, Commercial V-Sat,Public Mobile Radio Trunked Services (PMRTS), Global MobilePersonal Communications Services (GMPCS), all types of ISPlicenses, Voice Mail/ Audiotex/ UMS, Resale of IPLC, MobileNumber Portability services, Infrastructure Provider Category-I(providing dark fibre, right of way, duct space, tower) exceptOther Service Providers. 100% Automatic up to 49%; Government route beyond 49%
14.2 Other Conditions    
  The licensing and security conditions as notifiedby the Department of Telecommunications (DoT) from time to time,shall be observed by licensee as well as investors except forforeign investment in "Other Service Providers", whichis allowed up to 100 percent under the automatic route.
15. Trading    
15.1 Cash and Carry Wholesale Trading/ WholesaleTrading (including sourcing from MSEs) 100% Automatic
15.1.1 Definition:(a) Cash and CarryWholesale trading (WT)/ Wholesale trading, shall mean sale ofgoods/ merchandise to retailers, industrial, commercial,institutional or other professional business users or to otherwholesalers and related subordinated service providers.(b) Wholesale trading shall, accordingly, implysales for the purpose of trade, business and profession, asopposed to sales for the purpose of personal consumption. Theyardstick to determine whether the sale is wholesale or not shallbe the type of customers to whom the sale is made and not thesize and volume of sales. Wholesale trading shall include resale,processing and thereafter sale, bulk imports with export/exbonded warehouse business sales and B2B e-Commerce.
15.1.2 Other Conditions    
  (a) For undertaking'WT', requisite licenses/ registration/ permits, as specifiedunder the relevant Acts/ Regulations/ Rules/ Orders of the StateGovernment/ Government Body/ Government Authority /LocalSelf-Government Body under that State Government should beobtained.(b) Except in cases ofsales to Government, sales made by the wholesaler shall beconsidered as 'cash and carry wholesale trading/ wholesaletrading' with valid business customers, only when WT is made tothe following entities:(i) Entities holdingsales tax/ VAT registration/ service tax/ excise duty/Goods andServices Tax (GST) registration; or(ii) Entities holdingtrade licenses i.e. a license/ registration certificate/membership certificate/ registration under Shops andEstablishment Act, issued by a Government Authority/ GovernmentBody/ Local Self-Government Authority, reflecting that theentity/ person holding the license/ registration certificate/membership certificate, as the case may be, is itself/ himself/herself engaged in a business involving commercial activity; or(iii) Entities holdingpermits/ license etc. for undertaking retail trade (liketehbazari and similar license for hawkers) from GovernmentAuthorities/ Local Self Government Bodies; or(iv) Institutions havingcertificate of incorporation or registration as a society orregistration as public trust for their self-consumption.Note: An Entity, towhom WT is made, may fulfil any one of the 4 conditions at (b)(i)to (iv) above.(c) Full recordsindicating all the details of such sales like name of entity,kind of entity, registration/ license/ permit etc. number, amountof sale etc. should be maintained on a day to day basis.(d) WT of goods shall bepermitted among companies of the same group. However, such WT togroup companies taken together shall not exceed 25 percent of thetotal turnover of the wholesale venture.(e) WT can be undertakenas per normal business practice, including extending creditfacilities subject to applicable regulations.(f) A wholesale/ cash and carry trader canundertake single brand retail trading, subject to the conditionsmentioned in para 15.3. An entity undertaking wholesale/ cash andcarry as well as retail business will be mandated to maintainseparate books of accounts for these two arms of the business andduly audited by the statutory auditors. Conditions under theseRegulations for wholesale/ cash and carry business and for retailbusiness have to be separately complied with by the respectivebusiness arms.
15.2 E-Commerce    
15.2.1 B2B E-commerce activities 100% Automatic
  Such companies would engage only in Business toBusiness (B2B) e-commerce and not in retail trading, inter aliaimplying that existing restrictions on FDI in domestic tradingwould be applicable to e-commerce as well.
15.2.2 Market place model of e-commerce 100 % Automatic
15.2.3 Other Conditions:    
  (a) E-commerce' meansbuying and selling of goods and services including digitalproducts over digital & electronic network;(b)['E-commerce entity' means a company incorporated under the Companies Act 1956 or the Companies Act, 2013] [Substituted ''E-commerce entity' means a company incorporated under Companies Act, 2013 ' by Notification No. G.S.R. 78(E), dated 31.1.2019 (w.e.f. 7.11.2017).]or aforeign company covered under section 2 (42) of the CompaniesAct, 2013 or an office, branch or agency in India as provided inSection 2 (v) (iii) of FEMA, 1999, owned or controlled by aperson resident outside India and conducting the e-commercebusiness;(c) 'Inventory basedmodel of e-commerce' means an e-commerce activity where inventoryof goods and services is owned by e-commerce entity and is soldto the consumers directly;(d) 'Market place modelof e-commerce' means providing of an information technologyplatform by an ecommerce entity on a digital & electronicnetwork to act as a facilitator between buyer and seller.(e) Digital &electronic network will include network of computers, televisionchannels and any other internet application used in automatedmanner such as web pages, extranets, mobiles etc.(f) Marketplacee-commerce entity will be permitted to enter into transactionswith sellers registered on its platform on B2B basis.(g) E-commercemarketplace may provide support services to sellers in respect ofwarehousing, logistics, order fulfilment, call centre, paymentcollection and other services.[(h) E-commerce entity providing a marketplace will not exercise ownership or control over the inventory i.e. goods purported to be sold.Explanation.- Inventory of a vendor will be deemed to be controlled by e-commerce marketplace entity if more than 25% of purchases of such vendor are from the marketplace entity or its group companies which will render the business into inventory based model.] [Substituted by Notification No. G.S.R. 78(E), dated 31.1.2019 (w.e.f. 7.11.2017).][(i) An entity having equity participation by e-commerce marketplace entity or its group companies or having control on its inventory by e-commerce marketplace entity or its group companies, will not be permitted to sell its products on the platform run by such marketplace entity.] [Substituted by Notification No. G.S.R. 78(E), dated 31.1.2019 (w.e.f. 7.11.2017).](j) Goods/ services madeavailable for sale electronically on website should clearlyprovide name, address and other contact details of the seller.Post sales, delivery of goods to the customers and customersatisfaction will be responsibility of the seller.(k) Payments for salemay be facilitated by the e-commerce entity in conformity withthe guidelines issued by the Reserve Bank in this regard.(l) Any warranty/guarantee of goods and services sold will be the responsibilityof the seller.[(m) E-commerce entities providing marketplace will not, directly or indirectly, influence the sale price of any goods or services and shall maintain level playing field. Services should be provided by e-commerce marketplace entity or other entities in which e-commerce marketplace entity has direct or indirect equity participation or common control, to vendors on the platform at arm's length and in a fair and non-discriminatory manner. [Substituted by Notification No. G.S.R. 78(E), dated 31.1.2019 (w.e.f. 7.11.2017).]Explanation.- Such services will include but not limited to fulfilment, logistics, warehousing, advertisement/marketing, payments, financing etc. Cash back provided by group companies of marketplace entity to buyers shall be fair and non-discriminatory. For the purposes of this clause, provision of services to any vendor on such terms which are not made available to other vendors in similar circumstances will be deemed unfair and discriminatory.](n) Guidelines on cash and carry wholesale trading as given in Sl No. 15.1.2 above shall apply to B2B e-commerce activities.[(o) No e-commerce marketplace entity shall mandate any seller to sell any of their product exclusively on its platform.(p) All existing investments shall have to be in compliance with the above conditions from the date of issue of this Notification.] [Inserted by Notification No. G.S.R. 78(E), dated 31.1.2019 (w.e.f. 7.11.2017).]Note:Foreign investment is not permitted ininventory based model of e-commerce.
15.2.4 Sale of services through e-commerce shall be underautomatic route subject to the sector specific conditions,applicable laws/ regulations, security and otherconditionalities.
15.3 Single Brand Product Retail Trading Foreigninvestment in Single Brand Product Retail Trading (SBRT) is aimedat attracting investments in production and marketing, improvingthe availability of such goods for the consumer, encouragingincreased sourcing of goods from India and enhancingcompetitiveness of Indian enterprises through access to globaldesigns, technologies and management practices. 100% [Automatic] [Substituted 'Automatic up to 49%; Government route beyond 49%' Notification No. G.S.R. 279(E), dated 26.3.2018 (w.e.f. 7.11.2017).]
15.3.1 Other conditions    
  (a) Products to be soldshould be of a 'Single Brand' only.(b) Products should besold under the same brand internationally i.e. products should besold under the same brand in one or more countries other thanIndia.(c) 'Single Brand'product-retail trading would cover only products which arebranded during manufacturing.[(d) A person resident outside India, whether owner of the brand or otherwise, shall be permitted to undertake 'single brand' product retail trading in the country for the specific brand, either directly by the brand owner or through a legally tenable agreement executed between the Indian entity undertaking single brand retail trading and the brand owner.] [Substituted by Notification No. G.S.R. 279(E), dated 26.3.2018 (w.e.f. 7.11.2017).](e) In respect ofproposals involving foreign investment beyond 51 percent,sourcing of 30 percent of the value of goods purchased, will bedone from India, preferably from MSMEs, village and cottageindustries, artisans and craftsmen, in all sectors. The quantumof domestic sourcing will be self-certified by the company, to besubsequently checked, by statutory auditors, from the dulycertified accounts which the company will be required tomaintain. The procurement requirement is to be met in the firstinstance as an average of five years total value of goodspurchased beginning 1st April of the year of the commencement ofthe business. Thereafter it shall be met on an annual basis. Forthe purpose of ascertaining the sourcing requirement, therelevant entity would be the company, incorporated in India,which is the recipient of foreign investment for the purpose ofcarrying out single brand product retail trading.(f) Subject to theconditions mentioned in this Para, a single brand retail tradingentity operating through brick and mortar stores, is permitted toundertake retail trading through e-commerce.[(g) *] [Omitted by Notification No. G.S.R. 279(E), dated 26.3.2018 (w.e.f. 7.11.2017).][(h) *] [Omitted by Notification No. G.S.R. 279(E), dated 26.3.2018 (w.e.f. 7.11.2017).][(i) Single brand retail trading entity shall be permitted to set off its incremental sourcing of goods from India for global operations during initial 5 years, beginning 1st April of the year of the opening of first store, against the mandatory sourcing requirement of 30% of purchases from India. For this purpose, incremental sourcing shall mean the increase in terms of value of such global sourcing from India for that single brand (in INR terms) in a particular financial year from India over the preceding financial year, by the non-resident entities undertaking single brand retail trading, either directly or through their group companies. After completion of this 5 years period, the SBRT entity shall be required to meet the 30% sourcing norms directly towards its India's operation, on an annual basis.] [Inserted by Notification No. G.S.R. 279(E), dated 26.3.2018 (w.e.f. 7.11.2017).]Note:(1) Conditions mentionedat (b) and (d) above shall not be applicable for undertaking SBRTof Indian brands.[(2) and (3) ***] [Deleted by Notification No. G.S.R. 279(E), dated 26.3.2018 (w.e.f. 7.11.2017).](4) Indian brands shouldbe owned and controlled by resident Indian citizens and/ orcompanies which are owned and controlled by resident Indiancitizens.[(5) Sourcing norms will not be applicable up to three years from commencement of the business i.e. opening of the first store for entities undertaking single brand retail trading of products having 'state-of-art' and 'cutting-edge' technology and where local sourcing is not possible. Thereafter, condition mentioned at 15.3.1(e) above will be applicable. A Committee under the Chairmanship of Secretary, DIPP, with representatives from NITI Aayog, concerned Administrative Ministry and independent technical expert(s) on the subject will examine the claim of applicants on the issue of the products being in the nature of 'state-of-art' and 'cutting-edge' technology where local sourcing is not possible and give recommendations for such relaxation.] [Substituted by Notification No. G.S.R. 279(E), dated 26.3.2018 (w.e.f. 7.11.2017).]
15.4 Multi Brand Retail Trading (MBRT) 51% Government
15.4.1 Other Conditions    
  (a) Fresh agriculturalproduce, including fruits, vegetables, flowers, grains, pulses,fresh poultry, fishery and meat products, can be unbranded.(b) Minimum amount to bebrought in as foreign investment would be USD 100 million.(c) At least 50 percentof the total foreign investment brought in the first tranche ofUSD 100 million, shall be invested in 'back-end infrastructure'within three years, where 'back-end infrastructure' will includecapital expenditure on all activities, excluding that onfront-end units; for instance, back-end infrastructure willinclude investment made towards processing, manufacturing,distribution, design improvement, quality control, packaging,logistics, storage, warehouse, agriculture market produceinfrastructure etc. Expenditure on land cost and rentals, if any,will not be counted for purposes of back-end infrastructure.Subsequent investment in the back-end infrastructure would bemade by the MBRT retailer as needed, depending upon its businessrequirements.(d) At least 30 percentof the value of procurement of manufactured/ processed productspurchased shall be sourced from Indian micro, small and mediumindustries, which have a total investment in plant &machinery not exceeding USD2 million. This valuation refers tothe value at the time of installation, without providing fordepreciation. The 'small industry' status would be reckoned onlyat the time of first engagement with the retailer and suchindustry shall continue to qualify as a 'small industry' for thispurpose, even if it outgrows the said investment of USD2 millionduring the course of its relationship with the said retailer.Sourcing from agricultural co-operatives and farmersco-operatives would also be considered in this category. Theprocurement requirement would have to be met, in the firstinstance, as an average of five years total value of themanufactured/ processed products purchased, beginning 1st Aprilof the year during which the first tranche of foreign investmentis received. Thereafter, it would have to be met on an annualbasis.(e) Self-certificationis required by the company, to ensure compliance of theconditions at serial nos. (b), (c) and (d) above, which could becross-checked, as and when required. Accordingly, the investorsshall maintain accounts, duly certified by statutory auditors.(f) Retail sales outletsmay be set up only in cities with a population of more than 10lakh as per the 2011 Census or any other cities as per thedecision of the respective State Governments, and may also coveran area of 10 kms. Around the municipal/ urban agglomerationlimits of such cities; retail locations will be restricted toconforming areas as per the Master/ Zonal Plans of the concernedcities and provision will be made for requisite facilities suchas transport connectivity and parking.(g) Government will havethe first right to procure agricultural products.(h) The above policy isan enabling policy only and the State Governments/ UnionTerritories would be free to take their own decisions in regardto implementation of the policy. Therefore, retail sales outletsmay be set up in those States/ Union Territories which haveagreed, or agree in future, to allow foreign investment in MBRTunder this policy. The States/ Union Territories which haveconveyed their agreement are mentioned at 15.4.2. Such agreement,in future, to permit establishment of retail outlets under thispolicy, would be conveyed to the Government of India through theDepartment of Industrial Policy and Promotion and additions wouldbe made to the said list. The establishment of the retail salesoutlets will be in compliance of applicable State/ UnionTerritory laws/ regulations, such as the Shops and EstablishmentsAct etc.(i) Retail trading, inany form, by means of e-commerce, would not be permissible, forcompanies with foreign investment engaged in multi-brand retailtrading.(j) Applications would be processed in theDepartment of Industrial Policy and Promotion, to determinewhether the proposed investment satisfies the notifiedguidelines, before being considered for Government approval.
15.4.2 States/ Union Territories are Andhra Pradesh,Assam, Delhi, Haryana, Himachal Pradesh, Jammu & Kashmir,Karnataka, Maharashtra, Manipur, Rajasthan, Uttarakhand, Daman &Diu and Dadra and Nagar Haveli (Union Territories)
15.5 Duty Free Shops 100% Automatic
15.5.1 Other Conditions:    
  (a) Duty Free Shopswould mean shops set up in custom bonded area at InternationalAirports/ International Seaports and Land Custom Stations wherethere is transit of international passengers.(b) Foreign investmentin Duty Free Shops is subject to compliance of conditionsstipulated under the Customs Act, 1962 and other laws, rules andregulations.(c) Duty Free Shop entity shall not engage into anyretail trading activity in the Domestic Tariff Area of thecountry.
16 Pharmaceuticals    
16.1 Greenfield 100% Automatic
16.2 Brownfield 100% Automatic up to 74%;
      Government route beyond 74%
16.3 Other Conditions    
  (a) 'Non-compete' clausewould not be allowed except in special circumstances with theGovernment approval.(b) The prospectiveinvestor and the prospective investee are required to provide acertificate given at 16.4 along with the application submittedfor Government approval.(c) Government approvalmay incorporate appropriate conditions for foreign investment inbrownfield cases.(d) Foreign investmentin brownfield pharmaceuticals, irrespective of entry route, isfurther subject to the following conditions(i) The production levelof National List of Essential Medicines (NLEM) drugs and/ orconsumables and their supply to the domestic market at the timeof induction of foreign investment, being maintained over thenext five years at an absolute quantitative level. The benchmarkfor this level would be decided with reference to the level ofproduction of NLEM drugs and/ or consumables in the threefinancial years, immediately preceding the year of induction offoreign investment. Of these, the highest level of production inany of these three years would be taken as the level.(ii) Research andDevelopment (R&D) expenses being maintained in value termsfor 5 years at an absolute quantitative level at the time ofinduction of foreign investment. The benchmark for this levelwould be decided with reference to the highest level of R&Dexpenses which has been incurred in any of the three financialyears immediately preceding the year of induction of foreigninvestment.(iii) The administrativeMinistry will be provided complete information pertaining to thetransfer of technology, if any, along with induction of foreigninvestment into the investee company.(iv) The administrativeMinistry (s) i.e. Ministry of Health and Family Welfare,Department of Pharmaceuticals or any other regulatoryAgency/Development as notified by Central Government from time totime, will monitor the compliance of conditionalities.Note :(1) Foreign investmentup to 100% under the automatic route is permitted formanufacturing of medical devices. The abovementioned conditionswill, therefore, not be applicable to greenfield as well asbrownfield projects of this industry.(2) Medical device means:-(a) Any instrument,apparatus, appliance, implant, material or other article, whetherused alone or in combination, including the software, intended byits manufacturer to be used specially for human beings or animalsfor one or more of the specific purposes of:-(aa) Diagnosis,prevention, monitoring, treatment or alleviation of any diseaseor disorder;(ab) diagnosis,monitoring, treatment, alleviation of, or assistance for, anyinjury or[disability] [Substituted 'handicap' by Notification No. G.S.R. 279(E), dated 26.3.2018 (w.e.f. 7.11.2017).];(ac) investigation,replacement or modification or support of the anatomy or of aphysiological process;(ad) supporting orsustaining life;(ae) disinfection ofmedical devices;(af) control ofconception;and which does notachieve its primary intended action in or on the human body oranimals by any pharmacological or immunological or metabolicmeans, but which may be assisted in its intended function by suchmeans;(b) an accessory to suchan instrument, apparatus, appliance, material or other article;[(c) in-vitro diagnostic device which is a reagent, reagent product, calibrator, control material, kit, instrument, apparatus, equipment or system, whether used alone or in combination thereof intended to be used for examination and providing information for medical or diagnostic purposes by means of examination of specimens derived from the human bodies or animals.] [Substituted by Notification No. G.S.R. 279(E), dated 26.3.2018 (w.e.f. 7.11.2017).][(3) ***] [Omitted by Notification No. G.S.R. 279(E), dated 26.3.2018 (w.e.f. 7.11.2017).]
16.4 Certificate to beFurnished by the Prospective Investor as well as the ProspectiveRecipient Entity It is certified that the following is thecomplete list of all inter-se agreements, including theshareholders agreement, entered into between foreign investor(s)and investee brownfield pharmaceutical entity1. ..................2. ...................3. ...................(copies of allagreements to be enclosed)It is also certifiedthat none of the inter-se agreements, including the shareholdersagreement, entered into between foreign investor(s) and investeebrownfield pharmaceutical entity contain any non-compete clausein any form whatsoever.It is further certifiedthat there are no other contracts/agreements between the foreigninvestor(s) and investee brownfield pharma entity other thanthose listed above.The foreign investor(s) and investee brownfieldpharma entity undertake to submit to the FIPB any inter-seagreements that may be entered into between them subsequent tothe submission and consideration of this application.|- 17 Railway Infrastructure    
17.1 Construction, operation and maintenance of thefollowing: (i) Suburban corridor projects through PPP, (ii)high-speed train projects, (iii) Dedicated freight lines, (iv)Rolling stock including train sets, and locomotives/ coachesmanufacturing and maintenance facilities, (v) RailwayElectrification, (vi) Signalling systems, (vii) Freightterminals, (viii) Passenger terminals, (ix) Infrastructure inindustrial park pertaining to railway line/ sidings includingelectrified railway lines and connectivity to main railway lineand (x) Mass Rapid Transport Systems. 100% Automatic
17.2 Other Conditions    
  (a) Foreign investmentin this sector open to private-sector participation is subject tosectoral guidelines of Ministry of Railways.(b) Proposals involving foreign investment beyond49 percent sensitive areas from security point of view, will bebrought by the Ministry of Railways before the Cabinet Committeeon Security (CCS) for consideration on a case to case basis.
F FINANCIAL SERVICESInvestment in financial services, other than thoseindicated below, would require prior Government approval.
F.1 Asset Reconstruction Companies 100% Automatic
F.1.1 Other Conditions    
  (a) Investment limit ofa sponsor in the shareholding of an ARC will be governed by theprovisions of Securitisation and Reconstruction of FinancialAssets and Enforcement of Security Interest Act, 2002. Similarly,investment by institutional/ non-institutional investors willalso be governed by the said Act.(b) FPIs can invest inthe Security Receipts (SRs) issued by ARCs. FPIs may be allowedto invest up to 100 percent of each tranche in SRs issued byARCs, subject to directions/ guidelines of Reserve Bank. Suchinvestment should be within the relevant regulatory cap asapplicable.(c) All investments would be subject to provisionsof the Securitisation and Reconstruction of Financial Assets andEnforcement of Security Interest Act, 2002.
F.2 Banking - Private sector 74% Automatic up to 49% Government route beyond 49%and up to 74%
F.2.1 Other conditions:    
  (a) At all times, atleast 26 percent of the paid up capital will have to be held byresidents, except in regard to a wholly-owned subsidiary of aforeign bank.(b) In case of NRIsindividual holdings is restricted to 5 percent of the total paidup capital both on repatriation and non-repatriation basis andaggregate limit cannot exceed 10 percent of the total paid upcapital both on repatriation and non-repatriation basis. However,NRI holdings can be allowed up to 24 percent of the total paid upcapital both on repatriation and non-repatriation basis subjectto a special resolution to this effect passed by the bankingcompany's general body.(c) Applications forforeign investment in private banks having joint venture/subsidiary in insurance sector may be addressed to the ReserveBank for consideration in consultation with the InsuranceRegulatory and Development Authority of India (IRDAI) in order toensure that the 49 percent limit of investment applicable for theinsurance sector is not breached.(d) Transfer of sharesunder FDI from residents to non-residents will require approvalof the Reserve Bank and/ or the Government, wherever applicable(e) The policies andprocedures prescribed by RBI and other institutions such asSecurities and Exchange Board of India, Ministry of CorporateAffairs and IRDAI on these matters will apply.(f) RBI guidelinesrelating to acquisition by purchase or otherwise of capitalinstruments of a private bank, if such acquisition results in anyperson owning or controlling 5 percent or more of the paid upcapital of the private bank will apply to foreign investment aswell.(g) Setting up of asubsidiary by foreign banks(i) Foreign banks willbe permitted to either have branches or subsidiaries but notboth.(ii) Foreign banksregulated by banking supervisory authority in the home countryand meeting Reserve Bank's licensing criteria will be allowed tohold 100 percent paid-up capital to enable them to set up awholly-owned subsidiary in India.(iii) A foreign bank mayoperate in India through only one of the three channels viz., (i)branches (ii) a wholly-owned subsidiary (iii) a subsidiary withaggregate foreign investment up to a maximum of 74 percent in aprivate bank.(iv) A foreign bank willbe permitted to establish a wholly-owned subsidiary eitherthrough conversion of existing branches into a subsidiary orthrough a fresh banking license. A foreign bank will be permittedto establish a subsidiary through acquisition of shares of anexisting private sector bank provided at least 26 percent of thepaid-up capital of the private sector bank is held by residentsat all times consistent with para (c) above.(v) A subsidiary of aforeign bank will be subject to the licensing requirements andconditions broadly consistent with those for new private sectorbanks.(vi) Guidelines forsetting up a wholly-owned subsidiary of a foreign bank will beissued separately by RBI.(vii) All applicationsby a foreign bank for setting up a subsidiary or for conversionof their existing branches to subsidiary in India will have to bemade to the RBI.(h) The present limit of10 percent on voting rights in respect banking companies may benoted by the potential investor.(i) All investments shall be subject to theguidelines prescribed for the banking sector under the BankingRegulation Act, 1949 and the Reserve Bank of India Act, 1934.
F.3 Banking - Public Sector    
F.3.1 Banking - Public Sector subject to BankingCompanies (Acquisition & Transfer of Undertakings) Acts,1970/ 80. This ceiling is also applicable to the State Bank ofIndia. 20% Government
F.4 Infrastructure Companies in the SecuritiesMarket    
F.4.1 Infrastructure Companies in the Securities MarketInfrastructure companies in Securities Markets, namely, stockexchanges, commodity derivative exchanges, depositories andclearing corporations, in compliance with Securities and ExchangeBoard of India Regulations 49% Automatic
F.4.2 Other conditions:    
  (a) Foreign investment,including investment by FPIs, will be subject to the Guidelines/Regulations issued by the Central Government, Securities andExchange Board of India and the Reserve Bank from time to time.(b) Words and expressions used herein and notdefined in these regulations but defined in the Companies Act,2013 (18 of 2013) or the Securities Contracts (Regulation) Act,1956 (42 of 1956) or the Securities and Exchange Board of IndiaAct, 1992 (15 of 1992) or the Depositories Act, 1996 (22 of 1996)or in the concerned Regulations issued by Securities and ExchangeBoard of India shall have the same meanings respectively assignedto them in those Acts/ Regulations.
F.5 Commodities Spot Exchange 49% Automatic
F.5.1 Investment shall be subject to guidelinesprescribed by the Central/ State Government
F.6 Power Exchanges    
  Power Exchanges under the Central ElectricityRegulatory Commission (Power Market) Regulations, 2010 49% Automatic
F.6.1 Other conditions    
  (a) [***] [Deleted by Notification No. G.S.R. 279(E), dated 26.3.2018 (w.e.f. 7.11.2017).](b) A person residentoutside India including persons acting in concert should not holdmore than 5 percent.(c) The investment would be in compliance withSecurities and Exchange Board of India Regulations, otherapplicable laws/ regulations, security and other conditionalities
F.7 Credit Information Companies 100% Automatic
F.7.1 Other conditions    
  (a) Foreign investmentin Credit Information Companies is subject to the CreditInformation Companies (Regulation) Act, 2005 and regulatoryclearance from the Reserve Bank.(b) FPI investment wouldbe permitted subject to the following conditions:(i) A single entityshall directly or indirectly hold below 10 percent equity;(ii) Any acquisition inexcess of 1 percent will have to be reported to Reserve Bank as amandatory requirement; and(iii) FPIs investing in Credit InformationCompanies shall not seek a representation on the Board ofDirectors based upon their shareholding.
F.8 Insurance    
F.8.1 (a) Insurance Company(b) Insurance Brokers(c) Third PartyAdministrators(d) Surveyors and LossAssessors(e) Other Insurance Intermediaries appointed underthe provisions of Insurance Regulatory and Development AuthorityAct, 1999 (41 of 1999) 49% Automatic
F.8.2 Other Conditions    
  (a) Foreign investmentin this sector shall be subject to compliance with the provisionsof the Insurance Act, 1938 and subject to necessary license/approval from the Insurance Regulatory & DevelopmentAuthority of India for undertaking insurance and relatedactivities.(b) An Indian Insurancecompany shall ensure that its ownership and control remains atall times with resident Indian entities as determined by CentralGovernment/ Insurance Regulatory and Development Authority ofIndia as per the rules/ regulation issued.(c) Where an entity likea bank, whose primary business is outside the insurance area, isallowed by the Insurance Regulatory and Development Authority ofIndia to function as an insurance intermediary, the foreignequity investment caps applicable in that sector shall continueto apply, subject to the condition that the revenues of suchentities from their primary (i.e., non-insurance related)business must remain above 50 percent of their total revenues inany financial year.(d) The provisions ofparagraphs F.2.1 relating to 'Banking-Private Sector', shall beapplicable in respect of bank promoted insurance companies.(e) Terms 'Control', 'Equity Share Capital','Foreign Direct Investment' (FDI), 'Foreign Investors', 'ForeignPortfolio Investment', 'Indian Insurance Company', 'IndianCompany', 'Indian Control of an Indian Insurance Company','Indian Ownership', 'Non-resident Entity', 'Public FinancialInstitution', 'Resident Indian Citizen', 'Total ForeignInvestment' will have the same meaning as provided inNotification No. G.S.R 115 (E), dated 19th February, 2015 issuedby Department of Financial Services and regulations issued byInsurance Regulatory and Development Authority of India from timeto time.
F.9 Pension Sector 49% Automatic
F.9.1 Other conditions    
  (a) Foreign investmentin this sector shall be in accordance with the Pension FundRegulatory and Development Authority (PFRDA) Act, 2013.(b) Foreign investmentin Pension Funds will be subject to the condition that entitiesinvesting in capital instruments issued by an Indian Pension Fundas per Section 24 of the PFRDA Act, 2013 shall obtain necessaryregistration from the PFRDA and comply with other requirements asper the PFRDA Act, 2013 and Rules and Regulations framed under itfor so participating in Pension Fund Management activities inIndia.(c) An Indian pension fund shall ensure that itsownership and control remains at all times with resident Indianentities as determined by the Government of India/ PFRDA as perthe rules/ regulation issued by them.
F.10 Other Financial Services 100% Automatic
F.10.1 Other Conditions    
  (a) Other FinancialServices will mean financial services activities regulated byfinancial sector regulators, viz., Reserve Bank, Securities andExchange Board of India, Insurance Regulatory and DevelopmentAuthority, Pension Fund Regulatory and Development Authority,National Housing Bank or any other financial sector regulator asmay be notified by the Government of India.(b) Foreign investmentin 'Other Financial Services' activities shall be subject toconditionalities, including minimum capitalization norms, asspecified by the concerned Regulator/Government Agency(c) 'Other FinancialServices' activities need to be regulated by one of the FinancialSector Regulators. In all such financial services activity whichare not regulated by any Financial Sector Regulator or where onlypart of the financial services activity is regulated or wherethere is doubt regarding the regulatory oversight, foreigninvestment up to 100 percent will be allowed under Governmentapproval route subject to conditions including minimumcapitalization requirement, as may be decided by the Government.(d) Any activity whichis specifically regulated by an Act, the foreign investmentlimits will be restricted to those levels/ limit that may bespecified in that Act, if so mentioned.(e) Downstream investments by any of these entitiesengaged in "Other Financial Services" will be subjectto these Regulations.