CONSOLIDATED FDI POLICY, 2017

Department of Industrial Policy and Promotion (DIPP) have issued the new circular on Consolidated FDI Policy for the year 2017 on 28 August 2017. The present consolidation subsumes and supersedes all Press Notes/Press Releases/Clarifications/Circulars issued by DIPP, which were in force as on 27 August 2017 and reflects the FDI Policy as on 28 August 2017.

I.                      Major Amendment - Foreign Investment Promotion Board (FIPB) which was abolished by Government has been given effect in the Consolidated FDI Policy, 2017.

                  Pursuant to above, Chapter 4 of policy which earlier had constitution of FIPB was replaced by introduction of Competent Authorities for sectors/activities requiring Government approval.

                  Definition of Competent Authority is also newly inserted which is as follows:

                  ‘Competent Authority’ means the concerned Administrative Ministry/Department empowered to grant government approval for foreign investment under the extant FDI Policy and FEMA Regulations.

                  Following is the list of sectorwise introduction of Competent Authority:

S. No.	Activity/ sector	% for which approval is sought	Administrative Ministry/ Department
(i)	Mining (Mining and mineral separation of titanium bearing minerals and ores, its value addition and integrated activities)	Upto 100%	Ministry of Mines
(ii)	Defence :	beyond 49% wherever it is likely to result in access to modern technology or for other reasons to be recorded
	a) Items requiring Industrial Licence under the Industries (Development & Regulation) Act, 1951, and/or Arms Act, 1959 for which the powers have been delegated by Ministry of Home Affairs to DIPP		Department of Defence Production, Ministry of Defence
	b) Manufacturing of Small Arms and Ammunitions covered under Arms Act 1959		Ministry of Home Affairs
(iii)	Broadcasting : a.       Terrestrial Broadcasting FM(FM Radio) b.      Up-linking of ‘News & Current Affairs’ TV Channels	Upto 49%	Ministry of Information & Broadcasting
(iv)	Print Media: a.       Publishing of newspaper and periodicals dealing with news and current affairs b.      Publication of Indian editions of foreign magazines dealing with news and current affairs	Upto 26%
	c.       Publishing/printing of scientific and technical magazines/specialty journals/ periodicals, subject to compliance with the legal framework as applicable and guidelines issued in this regard from time to time by Ministry of Information and Broadcasting. d.      Publication of facsimile edition of foreign newspapers	Upto 100%
(v)	Civil Aviation: (a) Scheduled Air Transport Service/ Domestic Scheduled Passenger Airline (b) Regional Air Transport Service	Beyond 49%	Ministry of Civil Aviation
(vi)	Satellites	Upto 100%	Department of Space
(vii)	Telecommunication	Beyond 49%	Department of Telecommunications
(viii)	Private Security Agencies	beyond 49% and up to 74%	Ministry of Home Affairs
(ix)	Trading (Single brand, Multi brand and Food Product retail trading) : a.       Single Brand Product Retail Trading	Beyond 49%	Department of Industrial Policy & Promotion
	b.      Multi Brand Retail Trading	Upto 51%
(x)	Applications for foreign investment into a Core Investment Company or an Indian company engaged only in the activity of investing in the capital of other India Company/ies	Upto 100%
(xi)	Banking: a.       Public Sector b.      Private Sector	Upto 20% beyond 49% and up to 74%.	Department of Financial Services
(xii)	Pharmaceuticals (Brownfield )	Beyond 74%	Department of Pharmaceuticals

In addition to above sectorwise bifurcation, competent authorities were also defined for following activities requiring approval:

(i)	FDI proposals by Non-Resident Indians (NRIs) requiring approval of the Government	Department of Industrial Policy & Promotion
(ii)	Export Oriented Units requiring approval of the Government
(iii)	Applications relating to issue of equity shares under the FDI policy under the Government route for import of capital goods/machinery/equipment (excluding second-hand machinery)
(iv)	Applications relating to issue of equity shares for pre-operative/pre-incorporation expenses (including payments of rent etc.)
(v)	Financial services activities which are not regulated by any Financial Sector Regulator or where only part of the financial services activity is regulated or where there is doubt regarding the regulatory oversight.	Department of Economic Affairs
(vi)	Applications involving investments from Countries of Concern which presently include Pakistan and Bangladesh, requiring security clearance as per the extant FEMA 20, FDI Policy and security guidelines, amended from time to time	Ministry of Home Affairs

II.                Sectorwise limits Amendment:

Sr No.	Sector	Before		After
1	(1)Teleports(setting up of up-linking HUBs/Teleports); (2)Direct to Home (DTH); (3)Cable Networks (Multi System operators (MSOs) operating at National or State or District level and undertaking upgradation of networks towards digitalization and addressability); (4)Mobile TV; (5)Headend-in-the Sky Broadcasting Service(HITS)	% of Equity/ FDI Cap	Entry Route (With Conditions)	% of Equity/ FDI Cap	Entry Route (With Conditions)
		100%	Automatic up to 49% Government route beyond 49%	100%	Automatic Route
2	Cable Networks(Other MSOs not undertaking upgradation of networks towards digitalization and addressability and Local Cable Operators (LCOs))	100%	Automatic up to 49% Government route beyond 49%	100%	Automatic Route
3	Airports (Existing Projects)	100%	Automatic up to 74% Government route beyond 74%	100%	Automatic Route
4	(a) Scheduled Air Transport Service/ Domestic Scheduled Passenger Airline (b) Regional Air Transport Service	49% FDI (100% for NRIs)	Automatic	100%	Automatic up to 49% (Automatic up to 100% for NRIs) Government route beyond 49%
5	Private Security Agencies	49%	Government	74%	Automatic up to 49% Government route beyond 49% and up to 74%
6	Pharmaceuticals (Brownfield)	100%	Government	100%	Automatic up to 74% Government route beyond 74%

III.             Modification in conditions of following sector:

a.       Activities under Non-Banking Finance Companies (NBFC) was replaced by other financial services and conditions for FDI in such sector were also amended.

b.      Definition of manufacturing amended and included trading sector through e-commerce.

c.       There were amendments in notes provided under Single Brand Product Retail Trading.

d.      Amendment to conditions of Agriculture

e.       Under other conditions of Civil aviation, definition of cargo was removed.

f.        Amendment in other conditions of Infrastructure Company in the Securities Market.