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Press Information Bureau

Government of India
Ministry of Commerce & Industry
01-August-2013 21:40 IST

Review of Foreign Direct Investment (FDI) caps and routes in various sectors.
Cabinet Decision

The Union Cabinet today approved the proposal for review of Foreign Direct Investment (FDI) caps and routes in
various sectors.

The Government has decided to amend the provisions relating to the FDI caps and routes in various sectors as
under:

1. Petroleum & Natural Gas

(Petroleum refining by the Public Sector Undertakings (PSU), without any disinvestment or
dilution of domestic equity in the existing PSUs.) (para 6.2.4.2)
FDI ceiling

Route

(a) Existing

49%

Government

(b) Proposed

49%

Automatic

2. Commodity exchanges (para 6.2. 17.4)

(a) Existing

49%(26%FDI+23%FII)

Government

(b) Proposed

49%(26%FDI+23%FII)

Automatic #

3. Power exchanges (para 6.2.19)

(a) Existing

49%(26%FDI+23%FII)

Government

(b) Proposed

49%(26%FDI+23%FII)

Automatic

4. Stock exchanges, depositories and clearing corporations (para 6.2.17.6.1)

(a) Existing

49%(26%FDI+23%FII)

Government

(b) Proposed

49%(26%FDI+23%FII)

Automatic

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5. Asset Reconstruction Company (para 6.2.17.1)
(a) Existing

74%(FDI + Fll)

(b) Proposed

100%(FDI+FII)

Government

Up to 49% Automatic 49% to 100%

Government

6. Credit Information Companies (CICs) (para 6.2.17.5)

(a) Existing

49% (FDI+FII)

Government

(b) Proposed

74%(FDI+FII)

Automatic

7. Tea sector including tea plantations (para 6.2.2.1)

(a) Existing

100% (divestment of 26%

to Indian partner within 5
years)

Government

(b) Proposed

100%

Government

8. Single-brand product retail trading (para 6.2.1 6.4)

(a) Existing

100%

Government

(b) Proposed

100%

Up to 49% Automatic 49% to 100%

Government ##

# Subject to guidelines issued by Department of Consumer Affairs/FMC.

## Existing paragraphs 6.2.16.4 (2) (d) and 6.2.16.4 (3) of 'Circular 1 of 2013-Consolidated FDI Policy' will be replaced with
following paragraphs:

Existing pargraphs

Proposed paragraphs

6.2.16.4 (2) (d)

6.2.16.4 (2) (d)

Only one non-resident entity, whether owner of

the brand or otherwise, shall be permitted to
undertake single brand product retail trading in the
country, for the specific brand, through a legally
tenable agreement, with the brand owner for

A non-resident entity or entities, whether owner of

the brand or otherwise shall be permitted to
undertake 'Single Brand' product retail trading in
the country for the specific brand, directly or
through a legally tenable agreement with the

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tenable agreement, with the brand owner for

undertaking single brand product retail trading in
respect of the specific brand for which approval is
being sought. The onus for ensuring compliance
with this condition shall rest with the Indian entity
carrying out single-brand product retail trading in
India. The investing entity shall provide evidence
to this effect at the time of seeking approval,
including a copy of the licensing/ franchise/sublicence
agreement,
specifically
indicating
compliance with the above condition.

through a legally tenable agreement with the

brand owner for undertaking single
brand product retail trading. The
onus for ensuring compliance with
this condition will rest with the Indian
entity carrying out single brand
product retail trading in India. The
investing entity shall provide evidence
to this effect at the time of seeking
approval, including a copy of the
licensing/ franchise/sub-license
agreement, specifically indicating
compliance with the above condition.
The requisite evidence should be filed
with the RBI for the automatic route
and SIA/FIPB for cases involving
approval.

6.2.16.4 (3) Application seeking permission of the

Government for FDI in retail trade of "Single
Brand" products would be made to the Secretariat
for Industrial Assistance (SIA) in the Department
of Industrial Policy & Promotion. The applications
would specifically indicate the product/ product
categories which are proposed to be sold under a
"Single Brand". Any additional to the product/
product categories to be sold under Single Brand"
would require a fresh approval of the Government.

6.2.16.4 (3) Application seeking permission of the

Government for FDI exceeding 49% in a company
which proposes to undertake single brand retail
trading in India would be made to the Secretariat
for Industrial Assistance (SIA) in the Department
of Industrial Policy and Promotion. The
applications would specifically indicate the
product/ product categories which are proposed to
be sold under a "Single Brand". Any addition to
the product/ product categories to be sold under
"Single Brand" would require a fresh approval of
the Government. In case of FDI up to 49% the
product/ product categories proposed to be sold
except food products would be provided to the
RBI.

9. Test Marketing (para 6.2.16.3)

(a) Existing

100%.

(b) Proposed

Government

Para to be deleted.

10. Telecom Services ( including Telecom Infrastructure Providers Category-l)

All telecom services including Telecom Infrastructure Providers Category-I, viz. Basic,
Cellular, United Access Services, Unified license (Access services), Unified License,
National/ International Long Distance, Commercial V-Sat, Public Mobile Radio Trunked
Services
(PMRTS), Global Mobile Personal Communications Services
(GMPCS), All types of ISP licences, Voice Mail/Audiotex/UMS, Resale of
IPLC, Mobile Number Portability services, Infrastructure Provider Category-l (providing
dark fibre, right of way, duct space, tower) except Other Service Providers.
(para 6.2.15.1, 6.2.15.2 and 6.2.15.3)

(a) Existing

74%.

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Up to 49% Automatic 49% to 74%

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Government

(b) Proposed

100%

Up to 49% Automatic 49% to 100%

Government@

(a) Existing

100%

Government

(b) Proposed

100%

Automatic

26%

Government

26%-No change $

Up to 26%, no change i.e., through

FIPB and CCEA if FDI exceeds Rs.
1200 crore.

11. Courier Services (para 6.2.10)

12. Defence (para 6.2.6)

(a) Existing

(b) Proposed

Above 26% to CCS on case to case

basis, which ensure access to modern
and 'state-of-art' technology in the
country.

FDI up to 100% with 49% under automatic route and beyond 49% through FIPB route subject to observance of
licensing and security conditions by licensee as well as investors as notified by the Department of
Telecommunications (DoT) from time to time.
Fll through portfolio investment is not permitted.

In the backdrop of the fairly modest FDI inflows over the last year and lack of growth in gross domestic capital
formation, FDI ceilings and entry routes have been liberalized for the aforestated sectors with a view to stimulating FDI
inflows in to the country thereby contributing to growth of investment, incomes and employment.
***
SC/NK/SKS

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