The government is considering further easing foreign direct investment (FDI) rules in a few sectors, including construction and food retail, a senior government official said on Wednesday. One of the proposals relates to allowing FDI in even undeveloped and underdeveloped plots in a project, albeit with certain conditions. The government currently permits 100% FDI in only developed plots where the basic trunk infrastructure is in place. A meeting was held in North Block on Wednesday for this purpose. It was attended by senior officials of various ministries, including finance, industry, urban development and health.
The industry ministry may approach the Cabinet on these proposals soon, said another official. In the retailing of food products, the food processing ministry has proposed allowing domestically-produced non-food items worth 25% of a foreign retailer’s investment at the farm-gate level.Among other proposals, the government has been considering allowing up to 100% FDI through the automatic route in single-brand retail.
Currently, beyond 49%, government approval is required. Even the proposal to relax rules in FDI in the print media is being considered. Presenting the Budget for 2017-18, finance minister Arun Jaitley had said the government would be considering further relaxing FDI rules to make it even easier for foreign companies to invest in India.
The Narendra Modi government has already announced two big rounds of relaxations in the FDI regime, first in November 2015 and then in June last year, easing rules in over a dozen sectors ranging from real estate, pharmaceuticals, food marketing, aviation, defence to e-commerce and banking. Total inflows of FDI (in equity) into India rose 29% in 2015-16 from a year before to $40 billion. Between April and December of 2016-17, the FDI inflows rose $46.40 billion, up 18% from a year earlier.