FDI policy liberalised, 100% FDI now in retail, construction

FDI policy liberalised, 100% FDI now in retail, construction

Foreign airlines are already allowed to own up to 49% of private airlines in India but were restricted from investing in the state-run carrier, which. But opening the floodgates as far as single brand retail trading is concerned, which is bound to dilute norms such as 30% mandatory local purchase, spells trouble ('Business' page - "Centre opens arms to single brand retail FDI", January 11).

The amendments are meant to liberalise and simplify the FDI policy so as to provide ease of doing business.

Wednesday's cabinet decisions came before the prime minister was to leave for the World Economic Forum meeting in Davos, Switzerland where Modi is expected to tout India as an attractive investment destination.

"This breakthrough will open up millions of new employment opportunities, a push to investment activity in the economy and expansion in economic growth trajectory in the coming times", he said. Earlier also 100 per cent FDI was allowed in the segment, but it required government approval.

In big bang reforms ahead of BJP governments last full Budget, foreign airlines were today allowed to buy up to 49 per cent stake in Air India while easing FDI rules for several sectors including single brand retail and construction.

As some critics have pointed out, the automatic approval of 100% FDI in single-brand retail comes with new caveats to replace existing ones and which will not be easy to meet for most companies.

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In the case of medical devices, the government has permitted a wide range of items that can attract up to 100 per cent FDI via the automatic route.

The net loss of Air India in 2016-17 was 3643 crores, and in 2017-18 were 3579 crores.

Currently, the policy provides for 49 percent FDI under automatic route in power exchanges.

The move should generate employment and give Indian consumers access to several global brands.

The Union Cabinet has given its approval to a number of amendments in the FDI Policy.

This is unedited, unformatted feed from the Press Trust of India wire.

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