Union Government changes FDI policy regime
Q. Union government on 20th June 2016 changed the FDI policy with the aim of providing major impetus to employment and job creation. FDI beyond 49 percent in Defence Sector was allowed through which route?- Published on 21 Jun 16a. Approval
b. Automatic
c. Both of the above
d. None of the above
ANSWER: Approval
Changes introduced in the policy include increase in sectoral caps, bringing more activities under automatic route and easing of conditionality for foreign investment. These amendments seek to further simplify the regulations governing FDI in India.
- To permit 100 percent FDI under government approval route for trading in respect of food products manufactured in India.
- FDI beyond 49% has been permitted through government approval route, in cases resulting in access to modern technology. FDI limit for defence sector has also been made applicable to Manufacturing of Small Arms and Ammunitions covered under Arms Act
- 100 percent FDI allowed under automatic route for Teleports, Direct to Home, Cable Networks and Mobile TV.
- Moreover, infusion of FDI beyond 49% in a company not seeking permission from Ministry will result in change in the ownership pattern.
- To permit 100% FDI under automatic route in Brownfield Airport projects. In Scheduled Air Transport Service and regional Air Transport Service, it has now been decided to raise FDI limit to 100%. For NRIs, 100% FDI will continue to be allowed under automatic route.
- FDI up to 49% is now permitted under automatic route in this sector and FDI beyond 49% and up to 74% would be permitted with government approval route.
