New Delhi: The Cabinet on Wednesday liberalised Foreign Direct Investment (FDI) in key sectors including allowing 100 per cent FDI under automatic route in single-brand retail trading.
This essentially means that government approval is no longer required for FDI in single brand retail trading. Until now, FDI up to 49 per cent was permitted under the automatic route but beyond that limit, the government’s nod was required.
Besides retail, the Cabinet also allowed foreign airlines to invest up to 49 per cent under approval route in national carrier Air India.
The decision was taken during the Cabinet meeting chaired by Prime Minister Narendra Modi.
Measures undertaken by the Government have resulted in increased FDI inflows in to the country. During the year 2014-15, total FDI inflows received were US $ 45.15 billion as against US $ 36.05 billion in 2013-14. During 2015-16, country received total FDI of US $ 55.46 billion. In the financial year 2016-17, total FDI of US $ 60.08 billion has been received, which is an all-time high.
The government said that the decision to liberalise and simplify FDI norms would help provide ease of doing business in the country and also lead to larger FDI inflows contributing to the growth of investment, income and employment.
In the recent past, the Government has brought FDI policy reforms in a number of sectors viz. Defence, Construction Development, Insurance, Pension, Other Financial Services, Asset Reconstruction Companies, Broadcasting, Civil Aviation, Pharmaceuticals, Trading etc.