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FOREIGN DIRECT INVESTMENT (FDI) is an investment made by a company or individual in one

country in another country, in the form of either establishing business operations or acquiring
business assets in the other country, such as ownership or controlling interest in a foreign
company.

Examples: Various IT companies like IBM, Ericsson, etc. have invested in India by establishing
business operations here. Various joint ventures like SBI life insurance is a joint venture
between State Bank of India (SBI) and BNP Paribas Assurance of France, etc.

FDI in India can be done through two routes: Automatic Route and Government Route.

Automatic route: In this, prior approval by the Government of India or Reserve Bank of India is
not required.

Government route: In this, prior approval by government is required. Foreign Investment

Promotion Board (FIPB) is the responsible agency to oversee this route.

FDI LIMITS IN INDIA

Sector Limit Entry Route

Agriculture & Animal Husbandry 100% Automatic
Plantation Sector 100% Automatic
[Tea,Coffee,Rubber,Cardamom,Palm oil,
Olive oil]
Mining 100% Automatic
Petroleum & Natural Gas 49% Automatic
[Petroleum refining by the Public Sector
Undertakings (PSU)]
Petroleum & Natural Gas[All other activity] 100% Automatic
Defence 100% Automatic upto 49%
Above 49% under
Government route
on case to case
basis
Broadcasting Carriage Services 100% Automatic upto 49%
Government route
beyond 49%

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Broadcasting Content Services 49% Government

Print Media 26% Government
[Publishing of newspaper and periodicals
dealing with news and current affairs ]
[Publication of Indian editions of foreign
magazines dealing with news and current
affairs ]
Print Media 100% Government
[Publishing/printing of scientific and
technical magazines/specialty journals/
periodical ]
[Publication of facsimile edition of foreign
newspapers ]
Civil Aviation 100% Automatic
Airports[Greenfield projects ] 100% Automatic
Airports[Existing projects ] 100% Automatic up to
74%
Government route
beyond 74%
Construction Development 100% Automatic
Industrial Parks 100% Automatic
Satellites- establishment and operation 100% Automatic
Private Security Agencies 74% Automatic
Telecom Services 100% Automatic up to
49%
Government route
beyond 49%
Trading 100% Automatic
[Cash & Carry Wholesale
Trading/Wholesale Trading (including
sourcing from MSEs) ]
E-commerce activities 100% Automatic
Single Brand product retail trading 100% Automatic up to
49%
Government route
beyond 49%
Multi Brand Retail Trading 51% Government

Processed Food Products 100% Automatic

Duty Free Shops 100% Automatic
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Railway Infrastructure 100% Automatic

Asset Reconstruction Companies 100% Automatic
Banking- Private Sector 74% Automatic up to
49%
Government route
beyond 49% and up
to 74%.
Banking- Public Sector 20% Government
Credit Information Companies (CIC) 100% Automatic
Infrastructure Company in the Securities 49% Automatic
Market[in compliance with SEBI
Regulations]
Insurance 49% Automatic
Pension Sector 49% Automatic
Power Exchanges 49% Automatic
White Label ATM Operations 100% Automatic
Non-Banking Finance Companies (NBFC) 100% Automatic
Pharmaceuticals[Greenfield] 100% Automatic
Pharmaceuticals[Brownfield] 100% Government
Railway Infrastructure 100% Automatic
Regulated Financial Services 100% Automatic