New Delhi:
Opening the doors to shore up foreign investments, the government on Tuesday liberalised FDI limits in a dozen sectors, including allowing 100 per cent in telecom and higher limits in 'state-of-the-art' defence manufacturing, to boost the sagging economy.
The Foreign Direct Investment (FDI) cap for civil aviation was, however, left unchanged at 49 per cent.
While the FDI cap in defence sector remained unchanged at 26 per cent, higher limits of foreign investments in 'state-of-the-art' technology manufacturing will be considered by the Cabinet Committee on Security, Commerce and Industry Minister Anand Sharma told reporters here.
In the contentious insurance sector, it was decided to raise the sectoral FDI cap from 26 per cent to 49 per cent under automatic route under which companies investing do not require prior government approval. A Bill to raise FDI cap in the sector is pending in the Rajya Sabha.
"Consensus" on raising FDI limits in some sectors and relaxing the route in others was arrived at a meeting Prime Minister Manmohan Singh took with his key ministers, Sharma said.
It was decided to allow 49 per cent FDI in single brand retail under the automatic route and beyond through the Foreign Investment Promotion Board (FIPB).
Besides civil aviation, Sharma said, no view was taken on relaxing FDI caps in airports, media, brownfield pharma and multi-brand retail.
In case of PSU oil refineries, commodity bourses, power exchanges, stock exchanges and clearing corporations, FDI will be allowed up to 49 per cent under automatic route as against current routing of the investment through FIPB.
The decisions taken on Tuesday were based on recommendations of Mayaram Committee which had suggested relaxing investment caps in about 20 sectors, but the meeting approved only in 12.
In basic and cellular services, FDI was raised to 100 per cent from current 74 per cent. Of this, up to 49 per cent will be allowed under automatic route and the remaining through FIPB approval.
A similar dispensation would be allowed for asset reconstruction companies and tea plantations.
FDI of up to 100 per cent was allowed in courier services under automatic route.
Earlier, similar amount of investment was allowed through FIPB route. In credit information firms 74 per cent FDI under automatic route would be allowed.
The ministry which had initiated a consultation processon the proposal by Department of Industrial Policy and Promotion (DIPP), decided to forward the issue related to permitting more FDI in broadcasting sector to TRAI and in print sector to the Press Council of India.
"We have not taken any view on media," Commerce and Industry Minister Anand Sharma told reporters. The I&B ministry had earlier informed DIPP that consultations with TRAI and PCI would take time so existing limits of FDI caps and entry routes may continue.
