Review of Foreign Direct Investment (FDI) policy on various sectors

The Department for Promotion of Industry and Internal Trade (DPIIT) has reviewed the extant FDI policy on various sectors and has made following amendments in the Consolidated FDI Policy Circular of 2017 (FDI Policy) vide Press Note No. 4 dated 18 September, 2019. The amendments will take effect from the date of FEMA notification.

Sectors	Erstwhile	As amended by DPIIT
Coal Mining	-          100% FDI - Automatic Route (1)   For Coal & Lignite mining for captive consumption by power projects, iron & steel and cement units and other eligible activities permitted under and subject to the provisions. (2)    For Setting up coal processing plants like washeries, subject to the condition that the company shall not do coal mining and shall not sell washed coal or sized coal from its coal processing plants in the open market and shall supply the washed or sized coal to those parties who are supplying raw coal to coal processing plants for washing or sizing	-          100% FDI- Automatic Route In addition to the points (1) and (2),the below is added (3)   For Sale of coal, for coal mining activities including *associated processing infrastructure subject to provisions of Coal Mines (special provisions) Act, 2015 and the Mines and Minerals (development and regulation) Act, 1957 as amended from time to time, and other relevant acts on the subject. *Associated Processing Infrastructure would include coal washery, crushing, coal handling, and separation (magnetic and non-magnetic
Contract Manufacturing	-          No specific provision	-          100% FDI- Automatic Route in contract manufacturing in India through a legally tenable contract, whether on Principal to Principal or Principal to Agent basis. -          Further, a manufacturer is permitted to sell its products manufactured in India through wholesale and/ or retail, including through e-commerce, without Government approval
Digital Media	-          No specific provision	26% - Government Route for uploading/ streaming of News & Current Affairs through Digital Media, on the lines of print media
Single Brand Retail Trading	-          30% of value of goods has to be procured from India if SBRT entity has FDI more than 51% -          Sourcing requirement the relevant entity would be the company, incorporated in India, which is the recipient of foreign investment for the purpose of carrying out single brand product retail trading -          SBRT entities have to operate through brick and mortar stores before starting retail trading of that brand through e-commerce	-          All procurements made from India by the SBRT entity for that single brand shall be counted towards local sourcing, irrespective of whether the goods procured are sold in India or exported. -          Sourcing of goods from India for global operations' can be done directly by the entity undertaking SBRT or its group companies (resident or non-resident}, or indirectly by them through a third party under a legally tenable agreement. -          Retail trading through online trade can also be undertaken prior to opening of brick and mortar stores, subject to the condition that the entity opens brick and mortar stores within 2 years from date of start of online retail Note: -          Conditions mentioned for Single Brand Retail Trading [refer SBRT conditions (b) and (d) of FDI Policy] will not be applicable for undertaking SBRT of Indian brands. -          Indian brands should be owned and controlled by resident Indian citizens and/or companies which are owned and controlled by resident Indian citizens. -          Sourcing norms will not be applicable up to three years from commencement of the business i.e. opening of first store or start of online retail, whichever is earlier for entities undertaking single brand retail trading of products having `state-of-art' and 'cutting-edge' technology and where local sourcing is not possible. Thereafter, provisions of [refer SBRT conditions (e) of FDI Policy] will be applicable. A Committee under the Chairmanship of Secretary, DPIIT, with representatives from NITI Aayog, concerned Administrative Ministry and independent technical expert(s) on the subject will examine the claim of applicants on the issue of the products being in the nature of 'state-of-art' and 'cutting-edge' technology where local sourcing is not possible and give recommendations for such relaxation.