Prime Minister Narendra Modi-led Union Cabinet on Wednesday took a slew of decisions, including the big bang Foreign Direct Investment reforms in key sectors: Air India, Single Brand Retail Trading, Construction and Power. DLF’s Managing Director Rajeev Talwar lauded the decision, saying that it will help India to achieve its $10 trillion-dream sooner.
“Promoting investments from abroad will help India leap to the $10 trillion-economy soon. The inflow of foreign funds will help Companies under debt,” he told BTVi. The government on Wednesday permitted foreign airlines to invest up to 49% in debt-ridden Air India, and eased norms for investment in single-brand retail, construction and power exchanges.
The government also relaxed foreign direct investment (FDI) policy for medical devices and audit firms associated with companies receiving overseas funds. The decisions will give a boost to foreign retailers like Ikea as the government approved 100% FDI under the automatic route for single-brand retail trading. Earlier, too, 100% FDI was allowed in the segment, but it required government approval.
Cabinet liberalises FDI policy in key sectors:
- The Union Cabinet has approved a number of amendments in FDI Policy. These policies are intended to liberalise and simplify the FDI policy so as to provide ease of doing business in the country. In turn, it will lead to larger FDI inflows contributing to growth of investment, income and employment. Decisions taken by the Cabinet includes,
- 100% FDI under automatic route for Single Brand Retail Trading. Now, no government approval will be required for FDI in Single Brand Retail Trading (SBRT)
- 100% FDI under automatic route in Construction Development has been approved.
- Foreign airlines have been allowed to invest up to 49% under approval route in Air India
- FIIs/FPIs have been allowed to invest in Power Exchanges through primary market.
- Definition of ‘medical devices’ have amended in the FDI Policy
