|
[Annex B] {|
|
| SL.No |
Sector/ Activity |
Foreign Investment Cap(%)
|
Entry Route |
| Agriculture |
| 1. |
Agriculture &Animal Husbandry
|
|
|
| |
|
a) |
Floriculture,horticulture, Apiculture and Cultivation Of vegetables &mushrooms under controlled conditions;
|
100% |
Automatic |
| b) |
Development and productionof seeds and planting material;
|
| c) |
Animal Husbandry(including breeding of dogs), Pisiculture, Aquaculture, undercontrolled conditions; and
|
| d) |
Services related to agroand allied sectors.
|
|
Note: Besides the above,FDI is not allowed in any other agricultural sector/ activity
|
| 1.1 |
Other Conditions |
|
|
| |
I. For companies dealingwith development of transgenic seeds/vegetables, the followingconditions apply:
|
| |
(i) |
When dealing withgenetically modified seeds or planting material the company shallcomply with safety requirements in accordance with laws enactedunder the Environment (Protection) Act on the geneticallymodified organisms.
|
| (ii) |
Any import of geneticallymodified materials if required shall be subject to the conditionslaid down vide Notifications issued under Foreign Trade(Development and Regulation) Act, 1992.
|
| (iii) |
The company shall complywith any other Law, Regulation or Policy governing geneticallymodified material in force from time to time.
|
| (iv) |
Undertaking of businessactivities involving the use of genetically engineered cells andmaterial shall be subject to the receipt of approvals fromGenetic Engineering Approval Committee (GEAC) and ReviewCommittee on Genetic Manipulation (RCGM).
|
| (v) |
Import of materials shallbe in accordance with National Seeds Policy.
|
| |
II. The term ‘undercontrolled conditions’ covers the following:
|
| (i) |
‘Cultivationunder controlled conditions’ for the categories ofFloriculture, Horticulture, Cultivation of vegetables andMushrooms is the practice of cultivation wherein rainfall,temperature, solar radiation, air humidity and culture medium arecontrolled artificially. Control in these parameters may beeffected through protected cultivation under green houses, nethouses, poly houses or any other improved infrastructurefacilities where micro-climatic conditions are regulatedanthropogenically.
|
| (ii) |
In case of AnimalHusbandry, scope of the term ‘under controlled conditions’covers –
|
| (a) |
Rearing of animals underintensive farming systems with stall-feeding. Intensive farmingsystem will require climate systems (ventilation,temperature/humidity management), health care and nutrition, herdregistering/pedigree recording, use of machinery, wastemanagement systems as prescribed by the National Livestock Policy2013 and in conformity with the existing ‘StandardOperating Practices and Minimum Standard Protocol.
|
| (b) |
Poultry breeding farms andhatcheries where micro-climate is controlled through advancedtechnologies like incubators, ventilation systems etc.
|
| (iii) |
In the case ofpisciculture and aquaculture, scope of the term ‘undercontrolled conditions’ covers –
|
| (a) |
Aquariums |
| (b) |
Hatcheries where eggs areartificially fertilized and fry are hatched and incubated in anenclosed environment with artificial climate control.
|
| (iv) |
In the case of apiculture,scope of the term ‘under controlled conditions’covers –Production of honey by bee-keeping, except inforest/wild, in designated spaces with control of temperaturesand climatic factors like humidity and artificial feeding duringlean seasons.
|
| 2. |
Tea Plantation |
| 2.1 |
Teasector including tea plantationsNote: Besides the above,FDI is not allowed in any other plantation sector/activity
|
100% |
Government |
| 2.2 |
Other Condition |
|
|
| |
Prior approval of theState Government concerned is required in case of any future landuse change
|
| 3. |
Mining |
|
|
| 3.1 |
Mining and Exploration ofmetal and non-metal ores including diamond, gold, silver andprecious ores but excluding titanium bearing minerals and itsores; subject to the Mines and Minerals (Development &Regulation) Act, 1957.
|
100% |
Automatic |
| 3.2 |
Coal and Lignite |
|
|
| |
(1) |
Coal & Lignite miningfor captive consumption by power projects, iron & steel andcement units and other eligible activities permitted under andsubject to the provisions of Coal Mines (Nationalization) Act,1973.
|
100% |
Automatic |
| |
(2) |
Setting up coal processingplants like washeries, subject to the condition that the companyshall not do coal mining and shall not sell washed coal or sizedcoal from its coal processing plants in the open market and shallsupply the washed or sized coal to those parties who aresupplying raw coal to coal processing plants for washing orsizing.
|
100% |
Automatic |
| 3.3 |
Mining and mineralseparation of titanium bearing minerals and ores, its valueaddition and integrated activities
|
| 3.3.1 |
Mining and mineralseparation of titanium bearing minerals & ores, its valueaddition and integrated activities subject to sectoralregulations and the Mines and Minerals (Development andRegulation) Act, 1957.
|
100% |
Government |
| 3.3.2 |
Other Conditions |
|
|
| |
India has large reservesof beach sand minerals in the coastal stretches around thecountry. Titanium bearing minerals viz. Ilmenite, rutile andleucoxene and Zirconium bearing minerals including zircon aresome of the beach sand minerals which have been classified as'prescribed substances' under the Atomic Energy Act, 1962.
|
|
Under the IndustrialPolicy Statement 1991, mining and production of mineralsclassified as 'prescribed substances' and specified in theSchedule to the Atomic Energy (Control of Production and Use)Order, 1953 were included in the list of industries reserved forthe public sector. Vide Resolution No. 8/1(1)/97- PSU /1422 dated6th October, 1998 issued by the Department of Atomic Energylaying down the policy for exploitation of beach sand minerals,private participation including Foreign Direct Investment (FDI),was permitted in mining and production of Titanium ores(Ilmenite, Rutile and Leucoxene) and Zirconium minerals (Zircon).
|
|
Vide Notification No. S.O.61(E), dated 18-1-2006, the Department of Atomic Energyre-notified the list of 'prescribed substances' under the AtomicEnergy Act, 1962. Titanium bearing ores and concentrates(Ilmenite, Rutile and Leucoxene) and Zirconium, its alloys andcompounds and minerals/ concentrates including Zircon, wereremoved from the list of 'prescribed substances'.
|
| (i) |
FDI for separation oftitanium bearing minerals & ores will be subject to thefollowing additional conditions viz:
|
| (A) |
value addition facilitiesare set up within India along with transfer of technology;
|
| (B) |
disposal of tailingsduring the mineral separation shall be carried out in accordancewith regulations framed by the Atomic Energy Regulatory Boardsuch as Atomic Energy (Radiation Protection) Rules, 2004 and theAtomic Energy (Safe Disposal of Radioactive Wastes) Rules, 1987.
|
| (ii) |
FDI will not be allowed inmining of 'prescribed substances' listed in the Notification No.SO 61(E), dated 18-1-2006 issued by the Department of AtomicEnergy.
|
| |
Clarification:(1) For titanium bearing ores such as Ilmenite, Leucoxene andRutile, manufacture of titanium dioxide pigment and titaniumsponge constitutes value addition, Ilmenite can be processed toproduce Synthetic Rutile or Titanium Slag as an intermediatevalue added product.(2) The objective is toensure that the raw material available in the country is utilizedfor setting up downstream industries and the technology availableinternationally is also made available for setting up suchindustries within the country. Thus, if with the technologytransfer, the objective of the FDI Policy can be achieved, theconditions prescribed at (I) (A) above shall be deemed to befulfilled.
|
| 4. |
Petroleum & NaturalGas
|
| 4.1 |
Exploration activities ofoil and natural gas fields, infrastructure related to marketingof petroleum products and natural gas, marketing of natural gasand petroleum products, petroleum product pipelines, naturalgas/pipelines, LNG Regasification infrastructure, market studyand formulation and Petroleum refining in the private sector,subject to the existing sectoral policy and regulatory frameworkin the oil marketing sector and the policy of the Government onprivate participation in exploration of oil and the discoveredfields of national oil companies.
|
100% |
Automatic |
| 4.2 |
Petroleum refining by thePublic Sector Undertakings (PSUs), without any disinvestment ordilution of domestic equity in the existing PSUs.
|
49% |
Automatic |
| 5. |
Defence |
| 5.1 |
Defence Industry subjectto Industrial license under the Industries (Development &Regulation) Act, 1951
|
49% |
Government route up to 49%Above 49% to Cabinet Committee on Security (CCS) on case to casebasis, wherever it is likely to result in access to modern and'state-of-art' technology in the country.
|
| |
Note:(i) The above limit of 49% is composite and includes all kinds offoreign investments i.e. Foreign Direct Investment (FDI), ForeignInstitutional Investors (FIIs), Foreign Portfolio Investors(FPIs), Non Resident Indians (NRIs) and Foreign Venture CapitalInvestors (FVCI) regardless of whether the said investments havebeen made under Schedule 1 (FDI), 2 (FII), 2A (FPI), 3 (NRI),6(FVCI) and 8 (QFI) of FEMA (Transfer or Issue of Security byPersons Resident Outside India) Regulations.(ii) Portfolio investmentby FPIs/FIIs/NRIs and investments by FVCIs together will notexceed 24% of the total equity of the investee/joint venturecompany. Portfolio investments will be under automatic route.
|
| 5.2 |
Other Conditions |
| |
i. |
Licence applications willbe considered and licences given by the Department of IndustrialPolicy & Promotion, Ministry of Commerce & Industry, inconsultation with Ministry of Defence and Ministry of ExternalAffairs.
|
| ii. |
The applicant companyseeking permission of the Government for FDI up to 49% should bean Indian company owned and controlled by resident Indiancitizens.
|
| iii. |
The management of theapplicant company should be in Indian hands with majorityrepresentation on the Board as well as the Chief Executives ofthe company/partnership firm being resident Indians.
|
| iv. |
Chief Security Officer(CSO) of the investee/ joint venture company should be residentIndian citizen.
|
| v. |
Full particulars of theDirectors and the Chief Executives should be furnished along withthe applications.
|
| vi. |
The Government reservesthe right to verify the antecedents of the foreign collaboratorsand domestic promoters including their financial standing andcredentials in the world market. Preference would be given tooriginal equipment manufacturers or design establishments andcompanies having a good track record of past supplies to ArmedForces, Space and Atomic energy sections and having anestablished R & D base.
|
| vii. |
There would be no minimumcapitalization for the FDI. A proper assessment, however, needsto be done by the management of the applicant company dependingupon the product and the technology. The licensing authoritywould satisfy itself about the adequacy of the net worth of thenon-resident investor taking into account the category of weaponsand equipment that are proposed to be manufactured.
|
| viii. |
The Ministry of Defence isnot in a position to give purchase guarantee for products to bemanufactured. However, the planned acquisition programme for suchequipment and overall requirements would be made available to theextent possible.
|
| ix. |
Investee/joint venturecompany should be structured to be self-sufficient in areas ofproduct design and development. The investee/joint venturecompany along with manufacturing facility, should also havemaintenance and life cycle support facility of the product beingmanufactured in India.
|
| x. |
Import of equipment forpre-production activity including development of prototype by theapplicant company would be permitted.
|
| xi. |
Adequate safety andsecurity procedures would need to be put in place by the licenseeonce the licence is granted and production commences. These wouldbe subject to verification by authorized Government agencies.
|
| xii. |
The standards and testingprocedures for equipment to be produced under licence fromforeign collaborators or from indigenous R & D will have tobe provided by the licensee to the Government nominated qualityassurance agency under appropriate confidentiality clause. Thenominated quality assurance agency would inspect the finishedproduct and would conduct surveillance and audit of the QualityAssurance Procedures of the licensee. Self-certification would bepermitted by the Ministry of Defence on case to case basis, whichmay involve either individual items, or group of itemsmanufactured by the licensee. Such permission would be for afixed period and subject to renewals.
|
| xiii. |
Purchase preference andprice preference may be given to the Public Sector organizationsas per guidelines of the Department of Public Enterprises.
|
| xiv. |
The Licensee shall beallowed to sell Defence items to Government entities under thecontrol of Ministry of Home Affairs (MHA), State Governments,Public Sector Undertakings (PSUs) and other valid DefenceLicensed Companies without prior approval of the Department ofDefence Production (DoDP). However, for sale of the items to anyother entity, the Licensee shall take prior permission from theDepartment of Defence Production, Ministry of Defence.
|
| xv. |
All applications seekingpermission of the Government for FDI in defence would be made tothe Secretariat of Foreign Investment Promotion Board (FIPB) inthe Department of Economic Affairs.
|
| xvi. |
Applications for FDI up to49% will follow the existing procedure with proposals involvinginflows in excess of Rs. 3000 crore being approved by CabinetCommittee on Economic Affairs (CCEA).
|
| xvii. |
Based on therecommendation of the Ministry of Defence and FIPB, approval ofthe Cabinet Committee on Security (CCS) will be sought by theMinistry of Defence in respect of cases seeking permission of theGovernment for FDI beyond 49% which are likely to result inaccess to modern and 'state-of-art' technology in the country.
|
| xviii. |
Proposals for FDI beyond49% with proposed inflow in excess of Rs. 3000 crores, which areto be approved by CCS will not require further approval of theCabinet Committee on Economic Affairs (CCEA).
|
| xix. |
Government decision onapplications for FDI in defence industry sector will be normallycommunicated within a time frame of 10 weeks from the date ofacknowledgement.
|
| xx. |
For the proposal seekingGovernment approval for foreign investment beyond 49% applicantshould be Indian company/foreign investor. Further condition atpara (iii) above will not apply on such proposals.
|
|
ServicesSector
|
|
InformationServices
|
| 6. |
Broadcasting |
| 6.1 |
Broadcasting CarriageServices
|
| 6.1.1 |
(1)Teleports (setting up of up-linking HUBs/Teleports);(2)Direct to Home (DTH);(3)Cable Networks [Multi System Operators (MSOs) operating atNational or State or District level and undertaking up gradationof networks towards digitalization and addressability]:(4)Mobile TV;(5) Headend-in-the SkyBroadcasting Service (HITS)
|
74% |
Automaticup to 49%Government route beyond49% and up to 74%
|
| 6.1.2. |
Cable Networks(Other MSOs not undertaking upgradation of networks towardsdigitalization and address ability and Local Cable Operators(LCOs)).
|
49% |
Automatic |
| 6.2 |
Broadcasting ContentServices
|
|
|
| 6.2.1 |
TerrestrialBroadcasting FM (FM Radio),subject to such terms andconditions, as specified from time to time, by Ministry ofInformation & Broadcasting, for grant of permission forsetting up of FM Radio stations.
|
26% |
Government |
| 6.2.2 |
Up-Linking of ‘News& Current Affairs’ TV Channels
|
26% |
Government |
| 6.2.3 |
Up-linking a Non-'News& Current Affairs' TV Channels/Down-linking of TV Channels
|
100% |
Government |
| 6.3 |
FDI forUp-linking/Down-linking TV Channels will be subject to compliancewith the relevant Uplinking/ Down-linking Policy notified by theMinistry of Information & Broadcasting from time to time.
|
| 6.4 |
Foreign Investment (FI) incompanies engaged in all the aforestated services will be subjectto relevant regulations and such terms and conditions, as may bespecified from time to time, by the Ministry of Information andBroadcasting.
|
| 6.5 |
The foreign investment(FI) limit in companies engaged in the afore stated activitiesshall include, in addition to FDI, investment by ForeignInstitutional Investors (FIIs), Foreign PortfolioInvestors(FPIs), Non-Resident Indians (NRIs), Foreign CurrencyConvertible Bonds (FCCBs), [ Depository Receipts issued underSchedule 10 of these Regulations with equity shares orcompulsorily and mandatorily convertible preference shares orcompulsory and mandatorily convertible debentures or warrant orany other security in which foreign direct investment can be madein terms of Schedule1 of the principal Regulations, asunderlying] (GDRs) and convertible preference shares held byforeign entities.]
|
| 6.6 |
Foreign investment in theaforestated broadcasting carriage services will be subject to thefollowing security conditions/ terms:
|
|
Mandatory Requirementfor Key Executives of the Company
|
| |
(i) |
The majority of Directorson the Board of the Company shall be Indian Citizens.
|
| (ii) |
The Chief ExecutiveOfficer (CEO), Chief Officer In-charge of technical networkoperations and Chief Security Officer should be resident Indiancitizens
|
|
Security Clearance ofPersonnel
|
| |
(iii) |
TheCompany, all Directors on the Board of Directors and such keyexecutives like Managing Director/ Chief Executive Officer, ChiefFinancial Officer (CFO), Chief Security Officer (CSO), ChiefTechnical Officer (CTO), Chief Operating Officer (COO),shareholders who individually hold 10% or more paid-up capital inthe company and any other category, as may be specified by theMinistry of Information and Broadcasting from time to time, shallrequire to be security cleared.Incase of the appointment of Directors on the Board of the Companyand such key executives like Managing Director/Chief ExecutiveOfficer, Chief Financial Officer (CFO), Chief Security Officer(CSO), Chief Technical Officer (CTO), Chief Operating Officer(COO), etc., as may be specified by the Ministry of Informationand Broadcasting from time to time, prior permission of theMinistry of Information and Broadcasting shall have to beobtained.It shall be obligatory onthe part of the company to also take prior permission from theMinistry of Information and Broadcasting before effecting anychange in the Board of Directors.
|
| (iv) |
The Company shall berequired to obtain security clearance of all foreign personnellikely to be deployed for more than 60 days in a year by way ofappointment, contract, and consultancy or in any other capacityfor installation, maintenance, operation or any other servicesprior to their deployment. The security clearance shall berequired to be obtained every two years.
|
|
Permision vis-a-visSecurity Clearance
|
| |
(v) |
The permission shall besubject to permission holder/licensee remaining security clearedthroughout the currency of permission. In case the securityclearance is withdrawn the permission granted is liable to beterminated forthwith.
|
| (vi) |
In the event of securityclearance of any of the persons associated with the permissionholder/licensee or foreign personnel being denied or withdrawnfor any reasons whatsoever, the permission holder/licensee willensure that the concerned person resigns or his servicesterminated forthwith after receiving such directives from theGovernment, failing which the permission/license granted shall berevoked and the company shall be disqualified to hold any suchPermission/license in future for a period of five years.
|
|
Infrastructure/Network/Softwarerelated requirement
|
| |
(vii) |
The officers/officials ofthe licensee companies dealing with the lawful interception ofServices will be resident Indian citizens.
|
| (viii) |
Details of infrastructure/network diagram (technical details of the network) could beprovided on a need basis only, to equipmentsuppliers/manufactures and the affiliate of the licensee company.Clearance from the licensor would be required if such informationis to be provided to anybody else.
|
| (ix) |
The Company shall nottransfer the subscribers' databases to any person/place outsideIndia unless permitted by relevant Law.
|
| (x) |
The Company must providetraceable identity of their subscribers.
|
|
Monitoring, Inspectionand Submission of Information
|
| |
(xi) |
The Company should ensurethat necessary provision (hardware/software) is available intheir equipment for doing the Lawful interception and monitoringfrom a centralized location as and when required by Government.
|
| (xii) |
The company, at its owncosts, shall, on demand by the Government or its authorizedrepresentative, provide the necessary equipment, services andfacilities at designated place(s) for continuous monitoring orthe broadcasting service by or under supervision of theGovernment or its authorized representative.
|
| (xiii) |
The Government of India,Ministry of Information & Broadcasting or its authorizedrepresentative shall have the right to inspect the broadcastingfacilities. No prior permission/intimation shall be required toexercise the right of Government or its authorized representativeto carry out the inspection. The company will, if required by theGovernment or its authorized representative, provide necessaryfacilities for continuous monitoring for any particular aspect ofthe company's activities and operations. Continuous monitoring,however, will be confined only to security related aspects,including screening of objectionable content.
|
| (xiv) |
The inspection willordinarily be carried out by the Government of India, Ministry ofInformation & Broadcasting or its authorized representativeafter reasonable notice, except in circumstances where givingsuch a notice will defeat the very purpose of the inspection.
|
| (xv) |
The company shall submitsuch information with respect to its services as may be requiredby the Government or its authorized representative, in the formatas may be required, from time to time.
|
| (xvi) |
The permissionholder/licensee shall be liable to furnish the Government ofIndia or its authorized representative or TRAI or its authorizedrepresentative, such reports, accounts, estimates, returns orsuch other relevant information and at such periodic intervals orsuch times as may be required.
|
| (xvii) |
The service providersshould familiarize/train designated officials of the Governmentor officials of TRAI or its authorized representative(s) inrespect of relevant operations/features of their systems.
|
|
National SecurityConditions
|
| |
(xviii) |
It shall be open to thelicensor to restrict the Licensee Company from operating in anysensitive area from the National Security angle. The Governmentof India, Ministry of Information and Broadcasting shall have theright to temporarily suspend the permission of the permissionholder/Licensee in public interest or for national security forsuch period or periods as it may direct. The company shallimmediately comply with any directives issued in this regardfailing which the permission issued shall be revoked and thecompany disqualified to hold any such permission, in future, fora period of five years.
|
| (xix) |
The company shall notimport or utilize any equipment, which are identified as unlawfuland/or render network security vulnerable.
|
| Other conditions |
| |
(xx) |
Licensor reserves theright to modify these conditions or incorporate new conditionsconsidered necessary in the interest of national security andpublic interest or for proper provision of broadcasting services.
|
| (xxi) |
Licensee will ensure thatbroadcasting service installation carried out by it should notbecome a safety hazard and is not in contravention of anystatute, rule or regulation and public policy.
|
| 7. |
Print Media |
| 7.1 |
Publishing of newspaperand periodicals dealing with news and current affairs
|
26% |
Government |
| 7.2 |
Publication of Indianeditions of foreign magazines dealing with news and currentaffairs
|
26% |
Government |
| 7.2.1 |
Other conditions |
|
|
| |
(i) |
'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.
|
| (ii) |
Foreign investment wouldalso be subject to the Guidelines for Publication of Indianeditions of foreign magazines dealing with news and currentaffairs issued by the Ministry of Information & Broadcastingon 4-12-2008.
|
| 7.3. |
Publishing/printing ofScientific and Technical Magazines/specialityjournals/periodicals, subject to compliance with the legalframework as applicable and guidelines issued in this regard fromtime to time by Ministry of Information and Broadcasting.
|
100% |
Government |
| 7.4. |
Publication of facsimileedition of foreign newspapers
|
100% |
Government |
| 7.4.1 |
Other conditions: |
|
|
| |
(i) |
FDI should be made by theowner of the original foreign newspapers whose facsimile editionis proposed to be brought out in India.
|
| (ii) |
Publication of facsimileedition of foreign newspapers can be undertaken only by an entityincorporated or registered in India under the provisions of theCompanies Act, as applicable.
|
| (iii) |
Publication of facsimileedition of foreign newspaper would also be subject to theGuidelines for publication of newspapers and periodicals dealingwith news and current affairs and publication of facsimileedition of foreign newspapers issued by Ministry of Information &Broadcasting on 31-3-2006, as amended from time to time.
|
| 8. |
Civil Aviation |
| 8.1 |
The Civil Aviation sectorincludes Airports, Scheduled and Non-Scheduled domestic passengerairlines, Helicopter services/Seaplane services, Ground HandlingServices, Maintenance and Repair organizations; Flying traininginstitutes; and Technical training institutions.
|
|
For the purposes of theCivil Aviation sector:
|
| |
(i) |
"Airport" meansa landing and taking off area for aircrafts, usually with runwaysand aircraft maintenance and passenger facilities and includesaerodrome as defined in clause (2) of section 2 of the AircraftAct, 1934;
|
| (ii) |
"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;
|
| (iii) |
"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;
|
| (iv) |
"Air TransportUndertaking" means an undertaking whose business includesthe carriage by air of passengers or cargo for hire or reward;
|
| (v) |
"Aircraft component"means any part, the soundness and correct functioning of which,when fitted to an aircraft, is essential to the continuedairworthiness or safety of the aircraft and includes any item ofequipment;
|
| (vi) |
"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;
|
| (vii) |
"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;
|
| (viii) |
"Non-Scheduled airTransport service" means any service which is not ascheduled air transport service and will include Cargo airlines;
|
| (ix) |
"Cargo airlines"would mean such airlines which meet the conditions as given inthe Civil Aviation Requirements issued by the Ministry of CivilAviation;
|
| (x) |
"Seaplane" meansan aeroplane capable normally of taking off from and alightingsolely on water;
|
| (xi) |
"Ground Handling"means (i) ramp handling, (ii) traffic handling both of whichshall include the activities as specified by the Ministry ofCivil Aviation through the Aeronautical Information Circularsfrom time to time, and (iii) any other activity specified by theCentral Government to be a part of either ramp handling ortraffic handling.
|
| 8.2 |
Airports |
|
|
| |
(a) |
Greenfield projects |
100% |
Automatic |
| (b) |
Existing projects |
100% |
Automatic upto 74% ;Government Route beyond 74%
|
| 8.3 |
Air Transport Services |
|
|
| |
(1) |
Scheduled Air TransportService/Domestic Scheduled Passenger Airline
|
49% (100% for NRIs) |
Automatic |
| |
(2) |
Non-Scheduled AirTransport Service
|
74% (100% for NRIs) |
AutomaticEWRoute beyond 49% and up to74%
|
| |
(3) |
Helicopter services/seaplane services requiring DGCA approval
|
100% |
Automatic |
| 8.3.1 |
Other Conditions |
|
|
| |
(a) |
Air Transport Serviceswould include Domestic Scheduled Passenger Airlines;Non-Scheduled Air Transport Services, helicopter and seaplaneservices.
|
| (b) |
Foreign airlines areallowed to participate in the equity of companies operating Cargoairlines, helicopter and seaplane services, as per the limits andentry routes mentioned above.
|
| (c) |
Foreign airlines are alsoallowed to invest in the capital of Indian companies, operatingscheduled and non-scheduled air transport services, up to thelimit of 49% of their paid-up capital. Such investment would besubject to the following conditions:
|
| (i) |
It would be made under theGovernment approval route.
|
| (ii) |
The 49% limit will subsumeFDI and FII/FPI investment.
|
| (iii) |
The investments so madewould need to comply with the relevant regulations of SEBI, suchas the Issue of Capital and Disclosure Requirements (ICDR)Regulations/ Substantial Acquisition of Shares and Takeovers(SAST) Regulations, as well as other applicable rules andregulations.
|
| (iv) |
A Scheduled Operator'sPermit can be granted only to a company:
|
| |
a) |
that is registered andhas its principal place of business within India;
|
| |
b) |
the Chairman and atleast two-thirds of the Directors of which are citizens of India;and
|
| |
c) |
the substantialownership and effective control of which is vested in Indiannationals.
|
| (v) |
All foreign nationalslikely to be associated with Indian scheduled and non-scheduledair transport services, as a result of such investment shall becleared from security view point before deployment; and
|
| (vi) |
All technical equipmentthat might be imported into India as a result of such investmentshall require clearance from the relevant authority in theMinistry of Civil Aviation.
|
|
Note: (i) The FDIlimits/entry routes, mentioned at paragraph 8.3(1) and 8.3(2)above, are applicable in the situation where there is noinvestment by foreign airlines.
|
|
(ii) The dispensation forNRIs regarding FDI up to 100% will also continue in respect ofthe investment regime specified at paragraph 8.3.1(c) (ii) above.
|
|
(iii) The policy mentionedat 8.3.1(c) above is not applicable to M/s Air India Limited
|
| 8.3.2. |
Foreign Airlines in thecapital of the Indian companies, operating schedule andnonscheduled air transport services
|
49% (100% for NRIs) |
Government |
| 8.4 |
Other Services underCivil Aviation sector
|
|
|
| |
(1) |
Ground Handling Servicessubject to sectoral regulations and security clearance
|
74% (100% for NRIs) |
Automaticupto 49%; GovernmentRoute beyond 49% and up to74%
|
| |
(2) |
Maintenance and Repairorganizations; flying training institutes and technical traininginstitutions
|
100% |
Automatic |
| 9. |
Courier servicesfor carrying packages, parcels and other items which do not comewithin the ambit of the Indian Post Office Act, 1898 andexcluding the activity relating to the distribution of letters
|
100% |
Automatic |
| 10. |
ConstructionDevelopment: Townships, Housing, Built-up infrastructure
|
| 10.1 |
Construction-developmentprojects (which would include development of townships,construction of residential/commercial premises, roads orbridges, hotels, resorts, hospitals, educational institutions,recreational facilities, city and regional level infrastructure,townships)
|
100% |
Automatic |
| |
Investment will be subjectto the following conditions:
|
| (A) |
|
Minimum area to bedeveloped under each project would be as under:
|
| (i) |
In case of development ofserviced plots, no minimum land area requirement.
|
| (ii) |
In case ofconstruction-development projects, a minimum floor area of 20,000sq. meter.
|
| (B) |
Investee company will berequired to bring minimum FDI of US$ 5 million within six monthsof commencement of the project. The commencement of the projectwill be the date of approval of the building plan/layout plan bythe relevant statutory authority. Subsequent tranches of FDI canbe brought till the period of ten years from the commencement ofthe project or before the completion of project, whicheverexpires earlier.
|
| (C) |
(i) |
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.
|
| (ii) |
The Government may, inview of facts and circumstances of a case, permit repatriation ofFDI or transfer of stake by one non-resident investor to anothernon-resident investor, before the completion of project. Theseproposals will be considered by FIPB on case to case basisinter-alia with specific reference to Note (i).
|
| (D) |
The project shall conformto the norms and standards, including land use requirements andprovision of community amenities and common facilities, as laiddown in the applicable building control regulations, 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 State Government/Municipal/ Local Body concerned, which approves the building /development plans, will monitor compliance of the aboveconditions by the developer.
|
| Note: |
| (i) |
It is clarified that FDIis 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).
|
| |
"Real estatebusiness" will have the same meaning as provided in FEMANotification No. 1/2000-RB dated May 03, 2000 read with RBIMaster Circular i.e. dealing in land and immovable property witha view to earning profit or earning income there from and doesnot include development of townships, construction ofresidential/ commercial premises, roads or bridges, educationalinstitutions, recreational facilities, city and regional levelinfrastructure, townships.
|
| (ii) |
The conditions at (A) to(C) above, will not apply to Hotels & Tourist Resorts;Hospitals; Special Economic Zones (SEZs); EducationalInstitutions, Old Age Homes and Investment by NRIs.
|
| (iii) |
The conditions at (A) and(B) above, will also not apply to investee/joint venturecompanies which commit at least 30 percent of the total projectcost for low cost affordable housing.
|
| (iv) |
An Indian company, whichis the recipient of FDI, shall procure a certificate from anarchitect empanelled by any Authority, authorized to sanctionbuilding plan to the effect that the minimum floor arearequirement has been fulfilled.
|
| (v) |
'Floor area' will bedefined as per the local laws/regulations of the respective Stategovernments/Union territories.
|
| (vi) |
Completion of the projectwill be determined as per the local bye-laws/ rules and otherregulations of State Governments.
|
| (vii) |
Project using at least 40%of the FAR/FSI for dwelling unit of floor area of not more than140 square meter will be considered as Affordable Housing Projectfor the purpose of FDI policy in Construction Development Sector.Out of the total FAR/ FSI reserved for Affordable Housing, atleast one-fourth should be for houses of floor area of not morethan 60 square meter.
|
| (viii) |
It is clarified that 100%FDI under automatic route is permitted in completed projects foroperation and management of townships, malls/ shopping complexesand business centres.
|
| 11. |
Industrial Parks - Newand existing
|
100% |
Automatic |
| 11.1 |
(i) |
"Industrial Park"is a project in which quality infrastructure in the form of plotsof developed land or built up space or a combination with commonfacilities, is developed and made available to all the allotteeunits for the purposes of industrial activity.
|
| (ii) |
“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 connectivities to the main railway line, water supply andsewerage, common effluent treatment facility, telecom network,generation and distribution of power, air conditioning.
|
| (iii) |
“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 connectivities to themain railway line, water supply and sewerage, common effluenttreatment, common testing, telecom services, air conditioning,common facility buildings, industrial canteens,convention/conference halls, parking, travel desks, securityservice, first aid center, ambulance and other safety services,training facilities and such other facilities meant for commonuse of the units located in the Industrial Park.
|
| (iv) |
"Allocable area"in the Industrial Park means-
|
| (a) |
in the case of plots ofdeveloped land - the net site area available for allocation tothe units, excluding the area for common facilities.
|
| (b) |
in the case of built upspace - the floor area and built-up space utilized for providingcommon facilities
|
| (c) |
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.
|
| (v) |
"Industrial Activity"means manufacturing; 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 R&D on biotechnology, pharmaceutical sciences/lifesciences, natural sciences and engineering; business andmanagement consultancy activities; and architectural, engineeringand other technical activities.
|
| 11.2 |
FDI in Industrial Parkswould not be subject to the conditionalities applicable forconstruction development projects etc. spelt out in para 11above, provided the Industrial Parks meet with the undermentionedconditions:
|
| (i) |
it would comprise of aminimum of 10 units and no single unit shall occupy more than 50%of the allocable area;
|
| (ii). |
the minimum percentage ofthe area to be allocated for industrial activity shall not beless than 66% of the total allocable area
|
| 12. |
Satellites -Establishment and operation
|
|
|
| 12.1 |
Satellites Establishmentand operation, subject to the sectoral guidelines of Departmentof Space/ ISRO
|
74% |
Government |
| 13. |
Private SecurityAgencies
|
49% |
Government |
| 14. |
Telecomservices (including Telecom Infrastructure Providers Category-l)All telecom servicesincluding Telecom Infrastructure Providers Category-I, viz.Basic, Cellular, United Access Services, Unified license (Accessservices), Unified License, National/ International LongDistance, Commercial V-Sat, Public Mobile Radio Trunked Services(PMRTS), Global Mobile Personal Communications Services (GMPCS),All types of ISP licenses, Voice Mail/Audiotex/ UMS, Resale ofIPLC, Mobile Number Portability services, Infrastructure ProviderCategory-I (providing dark fibre, right of way, duct space,tower) except Other Service Providers.
|
49% |
Automatic upto 49%Government route beyond 49%
|
| 14.1.1 |
Other Condition |
|
|
| |
FDI up to 100% with 49% onthe automatic route and beyond 49% on the government routesubject to observance of licensing and security conditions bylicensee as well as investors as notified by the Department ofTelecommunications (DoT) from time to time, expect “OtherService Providers”, which are allowed 100% FDI on theautomatic route.
|
| 15. |
Trading |
|
|
| 15.1 |
(i) Cash & CarryWholesale Trading/Wholesale Trading (including sourcing fromMSEs)
|
100% |
Automatic |
| 15.1.1 |
Definition: Cash &Carry Wholesale trading/Wholesale trading, would mean sale ofgoods/merchandise to retailers, industrial, commercial,institutional or other professional business users or to otherwholesalers and related subordinated service providers. Wholesaletrading would, accordingly, imply sales for the purpose of trade,business and profession, as opposed to sales for the purpose ofpersonal consumption. The yardstick to determine whether the saleis wholesale or not would be the type of customers to whom thesale is made and not the size and volume of sales. Wholesaletrading would include resale, processing and thereafter sale,bulk imports with ex-port/ ex-bonded warehouse business sales andB2B e-Commerce.
|
| 15.1.2 |
Guidelines for Cash &Carry Wholesale Trading/Wholesale Trading (WT):
|
| (a) |
For undertaking ‘WT',requisite licenses/registration/permits, as specified under therelevant Acts/Regulations/Rules/Orders of the StateGovernment/Government Body/Government Authority /LocalSelf-Government Body under that State Government should beobtained.
|
| (b) |
Except in case of sales toGovernment, sales made by the wholesaler would be considered as'cash & carry wholesale trading/wholesale trading' with validbusiness customers, only when WT are made to the followingentities:
|
| (i) |
Entities holding salestax/VAT registration/service tax/excise duty registration; or
|
| (ii) |
Entities holding tradelicenses i.e. a license/registration certificate/membershipcertificate/registration under Shops and Establishment Act,issued by a Government Authority/Government Body/ LocalSelf-Government Authority, reflecting that the entity/personholding the license/registration certificate/membershipcertificate, as the case may be, is itself/himself/herselfengaged in a business involving commercial activity; or
|
| (iii) |
Entities holdingpermits/license etc. for undertaking retail trade (like tehbazariand 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 anyone of the 4 conditions.
|
| (c) |
Full records indicatingall the details of such sales like name of entity, kind ofentity, registration/ license/permit etc. number, amount of saleetc. should be maintained on a day to day basis.
|
| (d) |
WT of goods would bepermitted among companies of the same group. However, such WT togroup companies taken together should not exceed 25% of the totalturnover of the wholesale venture.
|
| (e) |
WT can be undertaken asper normal business practice, including extending creditfacilities subject to applicable regulations.
|
| (f) |
A Wholesale/Cash &carry trader cannot open retail shops to sell to the consumerdirectly.
|
| 15.2 |
B2B E-commerceactivities
|
100% |
Automatic |
| |
E-commerce activitiesrefer to the activity of buying and selling by a company throughthe e-commerce platform. Such companies would engage only inBusiness to Business (B2B) e-commerce and not in retail trading,inter alia implying that existing restrictions on FDI in domestictrading would be applicable to e-commerce as well.
|
| 15.3 |
Single Brand productretail trading
|
100% |
Automatic up to 40%Government route beyond 49%
|
| |
(1) |
Foreign Investment inSingle Brand product retail trading is aimed at attractinginvestments in production and marketing, improving theavailability 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.
|
| (2) |
FDI in Single Brandproduct retail trading would be subject to the followingconditions:
|
| (a) |
Products to be sold shouldbe of a 'Single Brand' only.
|
| (b) |
Products should be soldunder the same brand internationally i.e. products should be soldunder the same brand in one or more countries other than India.
|
| (c) |
'Single Brand'product-retail trading would cover only products which arebranded during manufacturing.
|
| (d) |
A non-resident entity orentities, whether owner of the brand or otherwise, shall bepermitted to undertake ‘single brand’ product retailtrading in the country for the specific brand, directly orthrough a legally tenable agreement, with the brand owner forundertaking single brand product retail trading. The onus forensuring compliance with this condition will rest with the Indianentity carrying out single-brand product retail trading in India.The investing entity shall provide evidence to this effect at thetime of seeking approval, including a copy of thelicensing/franchise/sub-licence agreement, specificallyindicating compliance with the above condition. The requisiteevidence should be filed with the RBI for the automatic route andSIA/FIPB for cases involving approval.
|
| (e) |
In respect of proposalsinvolving FDI beyond 51 %, sourcing of 30% of the value of goodspurchased, will be done from India, preferably from MSMEs,village and cottage industries, artisans and craftsmen, in allsectors. The quantum of domestic sourcing will be self-certifiedby the company, to be subsequently checked, by statutoryauditors, from the duly certified accounts which the company willbe required to maintain. This procurement requirement would haveto be met, in the first instance, as an average of five years;total value of the goods purchased, beginning 1st April of theyear during which the first tranche of FDI is received.Thereafter, it would have to be met on an annual basis. For thepurpose of ascertaining the sourcing requirement, the relevantentity would be the company, incorporated in India, which is therecipient of FDI for the purpose of carrying out single-brandproduct retail trading.
|
| (f) |
Retail trading, in anyform, by means of e-commerce, would not be permissible, forcompanies with FDI, engaged in the activity of single brandretail trading.
|
| (3) |
Applications seekingpermission of the Government for FDI exceeding 49% in a companywhich proposes to undertake single brand retail trading in Indiawould be made to the Secretariat for Industrial Assistance (SIA)in the Department of Industrial Policy & Promotion. Theapplications would specifically indicate the product/ productcategories which are proposed to be sold under a ‘SingleBrand’. Any addition to the product/ product categories tobe sold under ‘Single Brand’ would require a freshapproval of the Government. In case of FDI upto 49%, the list ofproducts/ product categories proposed to be sold except foodproducts would be provided to the RBI.
|
| (4) |
Applications would beprocessed in the Department of Industrial Policy & Promotion,to determine whether the proposed investment satisfies thenotified guidelines, before being considered by the FIPB forGovernment approval.
|
| 15.4 |
Multi Brand RetailTrading
|
15% |
Government |
| |
(1) |
FDI in multi brand retailtrading, in all products, will be permitted, subject to thefollowing conditions:
|
| (i) |
Fresh agriculturalproduce, including fruits, vegetables, flowers, grains, pulses,fresh poultry, fishery and meat products, may be unbranded.
|
| (ii) |
Minimum amount to bebrought in, as FDI, by the foreign investor, would be US $ 100million.
|
| (iii) |
At least 50% of total FDIbrought in the first tranche of US $ 100 million, shall beinvested in 'back-end infrastructure' within three years, where'back-end infrastructure' will include capital expenditure on allactivities, excluding that on front-end units; for instance,back-end infrastructure will include investment made towardsprocessing, manufacturing, distribution, design improvement,quality control, packaging, logistics, storage, warehouse,agriculture market produce infrastructure etc. Expenditure onland cost and rentals, if any, will not be counted for purposesof back-end infrastructure. Subsequent investment in the back-endinfrastructure would be made by the MBRT retailer as needed,depending upon its business requirements.
|
| (iv) |
At least 30% of the valueof procurement of manufactured/processed products purchased shallbe sourced from Indian micro, small and medium industries, whichhave a total investment in plant & machinery not exceeding US$ 2.00 million. This valuation refers to the value at the time ofinstallation, without providing for depreciation. The 'smallindustry' status would be reckoned only at the time of firstengagement with the retailer and such industry shall continue toqualify as a 'small industry' for this purpose, even if itoutgrows the said investment of US $ 2.00 million during thecourse of its relationship with the said retailer. Sourcing fromagricultural co-operatives and farmers co-operatives would alsobe considered in this category. The procurement requirement wouldhave to be met, in the first instance, as an average of fiveyears total value of the manufactured/processed productspurchased, beginning lst April of the year during which the firsttranche of FDI is received. Thereafter, it would have to be meton an annual basis.
|
| (v) |
Self-certification by thecompany, to ensure compliance of the conditions at serial Nos.(i), (ii) and (iv) above, which could be cross-checked, as andwhen required. Accordingly, the investors shall maintainaccounts, duly certified by statutory auditors.
|
| (vi) |
Retail sales outlets maybe set up only in cities with a population of more than 10 lakhas per the 2011 Census or any other cities as per the decision ofthe respective State Governments, and may also cover an area of10 kms. Around the municipal/urban agglomeration limits of suchcities; retail locations will be restricted to conforming areasas per the Master/Zonal Plans of the concerned cities andprovision will be made for requisite facilities such as transportconnectivity and parking.
|
| (vii) |
Government will have thefirst right to procurement of agricultural products.
|
| (viii) |
The above policy is anenabling policy only and the State Governments/Union Territorieswould be free to take their own decisions in regard toimplementation of the policy. Therefore, retail sales outlets maybe set up in those States/Union Territories which have agreed, oragree in future, to allow FDI in MBRT under this policy. The listof States/Union Territories which have conveyed their agreementis at (2) below. Such agreement, in future, to permitestablishment of retail outlets under this policy, would beconveyed to the Government of India through the Department ofIndustrial Policy & Promotion and additions would be made tothe list at (2) below accordingly. The establishment of theretail sales outlets will be in compliance of applicableState/Union Territory laws/ regulations, such as the Shops andEstablishments Act etc.
|
| (ix) |
Retail trading, in anyform, by means of e-commerce, would not be permissible, forcompanies with FDI, engaged in the activity of multi-brand retailtrading.
|
| (x) |
Applications would beprocessed in the Department of Industrial Policy & Promotion,to determine whether the proposed investment satisfies thenotified guidelines, before being considered by the FIPB forGovernment approval.
|
| (2) |
List of States/UnionTerritories as mentioned in Paragraph 16.4.(1) (viii)
|
| 1. |
Andhra Pradesh |
| 2. |
Assam |
| 3. |
Delhi |
| 4. |
Haryana |
| 5. |
Himachal Pradesh |
| 6. |
Jammu & Kashmir |
| 7. |
Karnataka |
| 8. |
Maharashtra |
| 9. |
Manipur |
| 10. |
Rajasthan |
| 11. |
Uttarakhand |
| 12. |
Daman & Diu and Dadraand Nagar Haveli (Union Territories)
|
| |
FinancialServicesForeign investment inother financial services, other than those indicated below, wouldrequire prior approval of the Government:
|
| F.1 |
Asset ReconstructionCompanies
|
|
|
| F.1.1 |
‘AssetReconstruction Company’ (ARC) means a company registeredwith the Reserve Bank of India under Section 3 of theSecuritisation and Reconstruction of Financial Assets andEnforcement of Security Interest Act, 2002 (SARFAESI Act).
|
100% |
Automatic up to 49%Government route beyond 49%
|
| F.1.2 |
Other Conditions |
| (i) |
Persons resident outsideIndia can invest in the capital of Asset Reconstruction Companies(ARCs) registered with Reserve Bank, up to 49% on the automaticroute, and beyond 49% on the Government route.
|
| (ii) |
No sponsor may hold morethan 50% of the shareholding in an ARC either by way of FDI or byrouting it through an FII/FPI controlled by the single sponsor.
|
| (iii) |
The total shareholding ofan individual FII/FPI shall be below 10% of the total paid-upcapital.
|
| (iv) |
FIIs/FPIs can invest inthe Security Receipts (SRs) issued by ARCs registered withReserve Bank. FIIs/FPIs can invest up to 74 per cent of eachtranche of scheme of SRs. Such investment should be within theFII/FPI limit on corporate bonds prescribed from time to time,and sectoral caps under extant FDI Regulations should also becomplied with.
|
| (v) |
All investments would besubject to provisions of section 3(3) (f) of Securitization andReconstruction of Financial Assets and Enforcement of SecurityInterest Act, 2002.
|
| F.2 |
Banking - PrivateSector
|
|
|
| F.2.1 |
Banking- Private SectorThis 74% limit willinclude investment under the Portfolio Investment Scheme (PIS) byFIIs/FPIs, NRIs and shares acquired prior to September 16, 2003by erstwhile OCBs, and continue to include IPOs, Privateplacements, GDR/ADRs and acquisition of shares from existingshareholders.
|
74% (FII/FPI upto 49%) |
Automaticupto 49%Government route beyond49% and upto 74%
|
| F.2.2 |
Other Conditions |
|
|
| |
(1) |
The aggregate foreigninvestment in a private bank from all sources will be allowed -up to a maximum of 74 per cent of the paid-up capital of theBank. At all times, at least 26 per cent of the paid up capitalwill have to be held by residents, except in regard to awholly-owned subsidiary of a foreign bank.
|
| (2) |
The stipulations as abovewill be applicable to all investments in existing private sectorbanks also.
|
| (3) |
The permissible limitsunder portfolio investment schemes through stock exchanges forFIIs/FPIs and NRIs will be as follows:
|
| (i) |
In the case of FIIs/FPIs,as hitherto, individual FII/FPI holding is restricted to below 10per cent of the total paid-up capital, aggregate limit for allFIIs/FPIs/QFIs cannot exceed 24 per cent of the total paid-upcapital, which can be raised to 49 per cent of the total paid-upcapital by the bank concerned through a resolution by its Boardof Directors followed by a special resolution to that effect byits General Body.
|
| (a) |
Thus, the FII/FPIinvestment limit will continue to be within 49 per cent of thetotal paid-up capital.
|
| (b) |
In the case of NRIs, ashitherto, individual holding is restricted to 5 per cent of thetotal paid-up capital both on repatriation and non-repatriationbasis and aggregate limit cannot exceed 10 percent of the totalpaid-up capital both on repatriation and non-repatriation basis.However, NRI holding can be allowed up to 24 per cent of thetotal paid-up capital both on repatriation and non-repatriationbasis provided the banking company passes a special resolution tothat effect in the General Body.
|
| (c) |
Applications for foreigndirect investment in private banks having jointventure/subsidiary in insurance sector may be addressed to theReserve Bank of India (RBI) for consideration in consultationwith the Insurance Regulatory and Development Authority (IRDA) inorder to ensure that the 49 per cent limit of foreignshareholding applicable for the insurance sector is not beingbreached.
|
| (d) |
Transfer of shares underFDI from residents to non-residents will continue to requireapproval of RBI and Government as per Regulation 14(5) asapplicable
|
| (e) |
The policies andprocedures prescribed from time to time by RBI and otherinstitutions such as SEBI, D/o Company Affairs and IRDA on thesematters will continue to apply.
|
| (f) |
RBI guidelines relating toacquisition by purchase or otherwise of shares of a private bank,if such acquisition results in any person owning or controlling 5per cent or more of the paid-up capital of the private bank willapply to non-resident investors as well.
|
| (ii) |
Setting up of a subsidiaryby foreign banks
|
| (a) |
Foreign banks will bepermitted to either have branches or subsidiaries but not both.
|
| (b) |
Foreign banks regulated bybanking supervisory authority in the home country and meetingReserve Bank's licensing criteria will be allowed to hold 100 percent paid-up capital to enable them to set up a wholly-ownedsubsidiary in India.
|
| (c) |
A foreign bank may operatein India through only one of the three channels viz., (i)branches (ii) a wholly-owned subsidiary and (iii) a subsidiarywith aggregate foreign investment up to a maximum of 74 per centin a private bank.
|
| (d) |
A foreign bank will bepermitted to establish a wholly-owned subsidiary either throughconversion of existing branches into a subsidiary or through afresh banking license. A foreign bank will be permitted toestablish a subsidiary through acquisition of shares of anexisting private sector bank provided at least 26 per cent of thepaid-up capital of the private sector bank is held by residentsat all times consistent with para (i) (b) above.
|
| (e) |
A subsidiary of a foreignbank will be subject to the licensing requirements and conditionsbroadly consistent with those for new private sector banks.
|
| (f) |
Guidelines for setting upa wholly-owned subsidiary of a foreign bank will be issuedseparately by RBI.
|
| (g) |
All applications by aforeign bank for setting up a subsidiary or for conversion oftheir existing branches to subsidiary in India will have to bemade to the RBI.
|
| (iii) |
At present there is alimit of ten per cent on voting rights in respect of bankingcompanies, and this should be noted by potential investor. Anychange in the ceiling can be brought about only after finalpolicy decisions and appropriate Parliamentary approvals.
|
| F.3 |
Banking - Public Sector |
|
|
| F.3.1 |
Banking - Public Sectorsubject to Banking Companies (Acquisition & Transfer ofUndertakings) Acts, 1970/80.
|
20% |
Government |
| |
This ceiling (20%) is alsoapplicable to the State Bank of India and its associate banks
|
|
|
| F.4 |
Commodity Exchanges |
|
|
| F.4.1 |
(1) |
Futures trading incommodities are regulated under the Forward Contracts(Regulation) Act, 1952. Commodity Exchanges, like StockExchanges, are infrastructure companies in the commodity futuresmarket. With a view to infuse globally acceptable best practices,modern management skills and latest technology, it was decided toallow foreign investment in Commodity Exchanges.
|
| (2) |
For the purposes of thisChapter,
|
| (i) |
"Commodity Exchange"is a recognized association under the provisions of the ForwardContracts (Regulation) Act, 1952, as amended from time to time,to provide exchange platform for trading in forward contracts incommodities.
|
| (ii) |
"Recognizedassociation" means an association to which recognition forthe time being has been granted by the Central Government undersection 6 of the Forward Contracts (Regulation) Act, 1952.
|
| (iii) |
"Association"means any body of individuals, whether incorporated or not,constituted for the purposes of regulating and controlling thebusiness of the sale or purchase of any goods and commodityderivative.
|
| (iv) |
"Forward contract"means a contract for the delivery of goods and which is not aready delivery contract.
|
| (v) |
"Commodityderivative" means-
|
| • |
a contract for delivery ofgoods, which is not a ready delivery contract; or
|
| • |
a contract for differenceswhich derives its value from prices or indices of prices of suchunderlying goods or activities, services, rights, interests andevents, as may be notified in consultation with the ForwardMarkets Commission by the Central Government, but does notinclude securities.
|
| F.4.2 |
Commodity Exchange |
49% |
Automatic |
| F.4.3 |
Other conditions: |
| (i) |
FII/FPI purchases shall berestricted to secondary market only.
|
| (ii) |
No non-residentinvestor/entity, including persons acting in concert, will holdmore than 5% of the equity in these companies.
|
| (iii) |
Foreign investment incommodity exchanges will be subject to the guidelines of theCentral Government/ Forward Markets Commission (FMC) from timeto time.
|
| F.5 |
Credit InformationCompanies (CIC)
|
|
|
| F.5.1 |
Credit InformationCompanies
|
74% |
Automatic |
| F.5.2 |
Other Conditions: |
| (1) |
Foreign investment inCredit Information Companies is subject to the Credit InformationCompanies (Regulation) Act, 2005.
|
| (2) |
Foreign investment ispermitted subject to regulatory clearance from RBI.
|
| (3) |
Such FII/FPI investmentwould be permitted subject to the conditions that:
|
| (a) |
A single entity shoulddirectly or indirectly hold below 10% equity;
|
| (b) |
Any acquisition in excessof 1 % will have to be reported to RBI as a mandatoryrequirement; and
|
| (c) |
FIIs investing in CICsshall not seek a representation on the Board of Directors basedupon their shareholding.
|
| F.6 |
Infrastructure Companyin the Securities Market
|
|
|
| F.6.1 |
Infrastructure companiesin Securities Markets, namely, stock exchanges, depositories andclearing corporations, in compliance with SEBI Regulations
|
49% |
Automatic |
| F.6.2 |
Other Conditions: |
|
|
| F.6.2.1 |
FII/FPI can invest onlythrough purchases in the secondary market
|
|
|
| F.7. |
Insurance |
|
|
| F.7.1 |
Insurance |
49% |
Automatic upto 26%,;Government route beyond 26% and upto 49%
|
| (i) |
Insurance Company |
| (ii) |
Insurance Brokers |
| (iii) |
Third Party Administrators |
| (iv) |
Surveyors and LossAssessors
|
| (v) |
Other InsuranceIntermediaries appointed under the provisions of InsuranceRegulatory and Development Authority Act, 1999 (41 of 1999)
|
| F.7.2 |
Other Conditions: |
| (a) |
No Indian insurancecompany shall allow the aggregate holdings by way of totalforeign investment in its equity shares by foreign investors,including portfolio investors, to exceed forty-nine percent ofthe paid up equity capital of such Indian insurance company.
|
| (b) |
Foreign direct investmentproposals which take the total foreign investment in the Indianinsurance company above 26 percent and up to the cap of 49percent shall be under Government route.
|
| (c) |
Foreign investment in thesector is subject to compliance of the provisions of theInsurance Act, 1938 and the condition that Companies bringing inFDI shall obtain necessary license from the Insurance Regulatory& Development Authority of India for undertaking insuranceactivities.
|
| (d) |
An Indian insurancecompany shall ensure that its ownership and control remains atall times in the hands of resident Indian entities referred to inNotification No.G.S.R 115 (E), dated 19th February, 2015.
|
| (e) |
Foreign portfolioinvestment in an Indian insurance company shall be governed bythe provisions contained in sub-regulations (2), (2A), (3) and(8) of regulation 5 of FEMA Regulations, 2000 and provisions ofthe Securities and Exchange Board of India (Foreign PortfolioInvestors) Regulations.
|
| (f) |
Any increase of foreigninvestment of an Indian insurance company shall be in accordancewith the pricing guidelines specified by Reserve Bank of Indiaunder the FEMA.
|
| (g) |
The foreign equityinvestment cap of 49 percent shall apply on the same terms asabove to Insurance Brokers, Third Party Administrators, Surveyorsand Loss Assessors and Other Insurance Intermediaries appointedunder the provisions of the Insurance Regulatory and DevelopmentAuthority Act,1999 (41 of 1999).
|
| (h) |
Provided that where anentity like a bank, whose primary business is outside theinsurance area, is allowed by the Insurance Regulatory andDevelopment Authority of India to function as an insuranceintermediary, the foreign equity investment caps applicable inthat sector shall continue to apply, subject to the conditionthat the revenues of such entities from their primary (i.e.non-insurance related) business must remain above 50 percent oftheir total revenues in any financial year.
|
| (i) |
The provisions ofparagraphs F.2.2 (3) (i) (c) & (e), relating to‘Banking-Private Sector’, shall be applicable inrespect of bank promoted insurance companies.
|
| (j) |
Terms ‘Control’,‘Equity Share Capital’, ‘Foreign DirectInvestment’ (FDI), ‘Foreign Investors’,‘Foreign Portfolio Investment’, ‘IndianInsurance Company’, ‘Indian Company’, ‘IndianControl of an Indian Insurance Company’, ‘IndianOwnership’, ‘Non-resident Entity’, ‘PublicFinancial Institution’, ‘Resident Indian Citizen’,‘Total Foreign Investment’ will have the same meaningas provided in Notification No. G.S.R 115 (E), dated 19thFebruary, 2015.
|
| F.8. |
Non-Banking FinanceCompanies (NBFCs)
|
|
|
| F.8.1 |
Foreign investment in NBFCis allowed under the automatic route in only the followingactivities:
|
100% |
Automatic |
| |
(i) |
Merchant Banking |
| (ii) |
Underwriting |
| (iii) |
Portfolio ManagementServices
|
| (iv) |
Investment AdvisoryServices
|
| (v) |
Financial Consultancy |
| (vi) |
Stock Broking |
| (vii) |
Asset Management |
| (viii) |
Venture Capital |
| (ix) |
Custodian Services |
| (x) |
Factoring |
| (xi) |
Credit Rating Agencies |
| (xii) |
Leasing & Finance |
| (xiii) |
Housing Finance |
| (xiv) |
Forex Broking |
| (xv) |
Credit Card Business |
| (xvi) |
Money Changing Business |
| (xvii) |
Micro Credit |
| (xviii) |
Rural Credit |
| F.8.2 |
Other Conditions |
|
|
| |
(1) Investment would besubject to the following minimum capitalisation norms:
|
| |
(i) |
US $0.5 million forforeign capital up to 51 % to be brought upfront.
|
| (ii) |
US $ 5 million for foreigncapital more than 51 % and up to 75% to be brought upfront.
|
| (iii) |
US $ 50 million forforeign capital more than 75% out of which US $ 7.5 million to bebrought upfront and the balance in 24 months.
|
| (iv) |
NBFCs (i) having foreigninvestment more than 75% and up to 100%, and (ii) with a minimumcapitalisation of US$ 50 million, can set up step downsubsidiaries for specific NBFC activities, without anyrestriction on the number of operating subsidiaries and withoutbringing in additional capital. The minimum capitalizationcondition as mandated by para 3.10.4.1 of DIPP Circular 1 onConsolidated FDI Policy, therefore, shall not apply to downstreamsubsidiaries.
|
| (v) |
Joint Venture operatingNBFCs that have 75% or less than 75% foreign investment can alsoset up subsidiaries for undertaking other NBFC activities,subject to the subsidiaries also complying with the applicableminimum capitalisation norm mentioned in (i), (ii) and (iii)above and (vi) below.
|
| (vi) |
Non-Fund based activities:US$ 0.5 million to be brought upfront for all permitted nonfundbased NBFCs irrespective of the level of foreign investmentsubject to the following condition:
|
|
It would not bepermissible for such a company to set up any subsidiary for anyother activity, nor it can participate in any equity of an NBFCholding/operating company.
|
|
Note: The followingactivities would be classified as Non-Fund Based activities:
|
| |
(a) |
Investment AdvisoryServices
|
| (b) |
Financial Consultancy |
| (c) |
Forex Broking |
| (d) |
Money Changing Business |
| (e) |
Credit Rating Agencies |
| (vii) |
This will be subject tocompliance with the guidelines of RBI.
|
|
Note: (i) Credit Cardbusiness includes issuance, sales, marketing & design ofvarious payment products such as credit cards, charge cards,debit cards, stored value cards, smart card, value added cardsetc.
|
| |
(ii) |
Leasing & Financecovers only financial leases and not operating leases.
|
|
FDI in operating leases ispermitted up to 100 % on the automatic route.
|
| (2) |
The NBFC will have tocomply with the guidelines of the relevant regulator/s, asapplicable.
|
| F.8.3. |
White Label ATM Operations |
100% |
Automatic |
| |
Other Conditions: |
| i. |
Any non-bank entityintending to set up a WLAs should have a minimum net worth of Rs.100 crore as per the latest financial year’s auditedbalance sheet, which is to be maintained at all times.
|
| ii. |
In case the entity is alsoengaged in any other 18 NBFC activities, then the foreigninvestment in the company setting up WLA, shall have to complywith the minimum capitalisation norms for foreign investment inNBFC activities, as provided in para F.8.2.
|
| iii. |
FDI in the WLAO will besubject to the specific criteria and guidelines issued by RBIvide Circular No. DPSS,CO.PD.No.2298/02.10.002/2011-12, asamended from time to time.
|
| F.9. |
Power Exchanges |
|
|
| F.9.1 |
Power Exchanges under theCentral Electricity Regulatory Commission (Power Market)Regulations, 2010
|
49% |
Automatic |
| F.9.2 |
Other conditions |
|
|
| |
(i) |
FII purchases shall berestricted to secondary market only;
|
|
|
| (ii) |
No non-residentinvestor/entity, including persons acting in concert, will holdmore than 5% of the equity in these companies; and
|
| (iii) |
The foreign investmentwould be in compliance with SEBI Regulations; other applicablelaws/regulations; security and other conditionalities.
|
| F.10 |
Pension Sector |
49% |
Automatic up to 26%;Government route beyond 26% and up to 49 %
|
| 16. |
Pharmaceuticals |
|
|
| 16.1 |
Greenfield |
100% |
Automatic |
| 16.2 |
Brown Field |
100% |
Government |
| 16.3 |
Other Conditions |
|
|
| | (iv) |
‘Non-compete’clause would not be allowed except in special circumstances withthe approval of the Foreign Investment Promotion Board.
|
| (v) |
The prospective investorand the prospective investee are required to provide acertificate along with the FIPB application.
|
| (vi) |
Government may incorporateappropriate conditions for FDI in brownfield cases, at the timeof granting approval.
|
| Note : |
| i. |
FDI upto 100% under theautomatic route is permitted for manufacturing of medicaldevices. The above-mentioned conditions will, therefore, not beapplicable to greenfield as well as brownfield projects of thisindustry.
|
| ii. |
Medical device means :- |
| a) |
Any instrument, apparatus,appliance, implant, material or other article, whether used aloneor in combination, including the software, intended by itsmanufacturer to be used specially for human beings or animals forone or more of the specific purposes of :-
|
| (aa) |
Diagnosis, prevention,monitoring, treatment or alleviation of any disease or disorder;
|
| (ab) |
diagnosis, monitoring,treatment, alleviation of, or assistance for, any injury orhandicap;
|
| (ac) |
investigation, replacementor modification or support of the anatomy or of a physiologicalprocess;
|
| (ad) |
supporting or sustaininglife;
|
| (ae) |
disinfection of medicaldevices;
|
| (af) |
control of conception; |
|
and which does not achieveits primary intended action in or on the human body or animals byany pharmacological or immunological or metabolic means, butwhich may be assisted in its intended function by such means;
|
| b) |
an accessory to such aninstrument, apparatus, appliance, material or other article;
|
| c) |
a device which is reagent,reagent product, calibrator, control material, kit, instrument,apparatus, equipment or system whether used alone or incombination thereof intended to be used for examination andproviding information for medical or diagnostic purposes by meansof in vitro examination of specimens derived from the human bodyor animals.
|
| iii. |
The definition of medicaldevice at Note (ii) above would be subject to the amendment inDrugs and Cosmetics Act.
|
| 17 |
Railway Infrastructure |
|
|
| |
Construction,operation and maintenance of the following:(i) Suburban corridorprojects through PPP, (ii) speed train projects, (iii) Dedicatedfreight lines, (iv) Rolling stock including train sets, andlocomotives/coaches manufacturing and maintenance facilities, (v)Railway Electrification, (vi) Signaling systems, (vii) Freightterminals, (viii) Passenger terminals, (ix) Infrastructure inindustrial park pertaining to railway line/sidings includingelectrified railway lines and connectivities to main railway lineand (x) Mass Rapid Transport Systems.100%
|
100% |
Automatic |
| |
Note:- |
| |
(i) |
Foreign Direct Investmentin the above mentioned activities open to private participationincluding FDI is subject to sectoral guidelines of Ministry ofRailways.
|
| (ii) |
Proposals involving FDIbeyond 49% in sensitive areas from security point of view, willbe brought by the Ministry of Railways before the CabinetCommittee on Security (CCS) for consideration on a case to casebasis.
|
