Consolidated FDI Policy Circular, 2016
Department
of Industrial Policy and Promotion (DIPP) has issued the new circular on
Consolidated FDI Policy for the year 2016 on 7 June 2016. Given below is a
brief note on the comparison between current circular and the previous circular
and the deviation from the provisions of the previous circular in the current
one:
I.
New
Provisions inserted:
1.
Following is the list of items inserted in definition:
a. Employee Stock option scheme
b. Investment vehicle
c. Manufacture
d. Sweat equity share
e. Unit
2.
A Company, trust and partnership firm incorporated outside India
owned and controlled by NRIs can invest in India under Schedule 4 of FEMA
(Transfer and issue of security by persons resident outside India)with the
special dispensation as available to NRIs under the FDI policy.
3.
NRI allowed to subscribe to National Pension System governed by
Pension Fund Regulatory and Development Authority (PFRDA).
4.
Provisions with regard to investment vehicle introduced.
5. Penal provisions separately mentioned in Consolidated policy
alongwith Adjudication and Appeals and Compounding Proceedings.
II. Provisions Amended:
1.
Definitions of following were amended :
a.
capital
b.
Control
c.
Non –resident Indian
d.
Owned
2.
Downstream investment provisions amended to include LLP.
3. Limits for the recommendations of FIPB for consideration of
Cabinet Committee on Economic Affairs (CCEA)on proposals with total foreign
equity inflow increased from Rs. 2000 Crore to Rs. 5000 Crore
III. Sectorwise
limits Amendment:
Sr No.
|
Sector
|
Before
|
After
|
||
1
|
i.
Tea sector
including tea plantations
ii.
Coffee
Plantations (Newly introduced)
iii.
Rubber
Plantations
iv.
Cardamom
Plantations (Newly introduced)
v.
Palm oil
tree plantations (Newly introduced)
vi.
Olive Oil
tree Plantations (Newly introduced)
|
% of
Equity/ FDI Cap
|
Entry
Route
|
% of
Equity/ FDI Cap
|
Entry
Route
|
100%
|
Government route
|
100%
|
Automatic Route
|
||
2
|
Defence Industry
|
49%
|
Government route up to 49%
Above 49% to Cabinet Committee on Security
(CCS) on case to case basis, wherever it is likely to result in access to
modern and ‘state-of-art’ technology in the country
|
49%
|
Automatic up to 49%
Above 49% under Government route on case to
case basis, wherever it is likely to result in access to modern and
‘state-of-art’ technology in the country
|
3
|
(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)
|
74%
|
Automatic up to 49%
Government route beyond 49% and up to 74%
|
100%
|
Automatic up to 49%
Government route beyond 49%
|
4
|
Cable Networks (Other MSOs not undertaking upgradation of
networks towards digitalization and addressability and Local Cable Operators
(LCOs))
|
49%
|
Automatic
|
100%
|
Automatic up to 49%
Government route beyond 49%
|
5
|
Terrestrial Broadcasting FM (FM Radio), subject to such terms and conditions, as
specified from time to time, by Ministry of Information & Broadcasting,
for grant of permission for setting up of FM Radio stations
|
26%
|
Government
|
49%
|
Government
|
6
|
Up-linking of ‘News & Current Affairs’
TV Channels
|
26%
|
Government
|
49%
|
Government
|
7
|
Up-linking of Non-‘News & Current
Affairs’ TV Channels/ Down-linking of TV Channels
|
100%
|
Government
|
100%
|
Automatic
|
8
|
Non-Scheduled Air Transport Service
|
74% FDI
(100% for NRIs)
|
Automatic up to 49%
Government route beyond 49% and up to 74%
|
100%
|
Automatic
|
9
|
Ground Handling Services subject to sectoral
regulations and security clearance
|
74%
(100% for NRIs)
|
Automatic up to 49%
Government route beyond 49% and up to 74%
|
100%
|
Automatic
|
10
|
Satellites- establishment and operation,
subject to the sectoral guidelines of Department of Space/ISRO
|
74%
|
Government
|
100%
|
Government
|
11
|
Duty Free Shops
|
-
|
-
|
100%
|
Automatic
|
12
|
Asset Reconstruction Company’ (ARC) means a
company registered with the Reserve Bank of India under Section 3 of the
Securitisation and Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002 (SARFAESI Act).
|
100% of paid-up capital of ARC
(FDI+FII/FPI)
|
Automatic up to 49%
Government route beyond 49%
|
100%
|
Automatic
|
13
|
(i) Insurance Company
(ii) Insurance Brokers
(iii) Third Party Administrators
(iv) Surveyors and Loss Assessors
(v)Other Insurance Intermediaries appointed
under the provisions of Insurance Regulatory and Development Authority Act,
1999 (41 of 1999)
|
49%
{FDI+FPI(FII,QFI)+NRI+FVCI+DR}
|
Automatic up to 26%
Government route beyond 26% and up to 49%
|
49%
|
Automatic
|
14
|
Pension Sector
|
-
|
-
|
49%
|
Automatic
|
E-Commerce on Business to Commerce i.e. B to C allowed after
fulfillment of certain conditions.
