SECTOR SPECIFIC CONDITION FOR FDI

Agriculture & Animal Husbandry
100%
FDI Permitted
100
Main condition:

a) Floriculture, Horticulture, and Cultivation of Vegetables & Mushrooms under controlled conditions;
b) Development and Production of seeds and planting  material;
c) Animal Husbandry (including  breeding of dogs), Pisciculture, Aquaculture, Apiculture; and
d)   Services related to agro and allied sectors

Note: Besides the above, FDI is not allowed in any other agricultural sector/activity

Other condition:

‘Cultivation under controlled conditions’ for the categories of floriculture, horticulture, cultivation of vegetables and mushrooms is the practice of cultivation wherein rainfall, temperature, solar radiation, air humidity and culture medium are controlled artificially. Control in these parameters may be effected through protected cultivation under green houses, net houses, poly houses or any other improved infrastructure facilities where micro-climatic conditions are regulated anthropogenically.

Air Transport Services (non-scheduled and other services under civil aviation sector)
100%
FDI Permitted
100
Main condition:

1. Non-Scheduled Air Transport Services

2. Helicopter services/seaplane services requiring DGCA approval

Other condition:

(a) Air Transport Services would include Domestic Scheduled Passenger Airlines; Non-Scheduled Air Transport Services, helicopter and seaplane services.

(b) Foreign airlines are allowed to participate in the equity of companies operating Cargo airlines, helicopter and seaplane services, as per the limits and entry routes mentioned above.

(c) Foreign airlines are also allowed to invest in the capital of Indian companies, operating scheduled and non-scheduled air transport services, up to the limit of 49% of their paid-up capital. Such investment would be subject to the following conditions:

(i) It would be made under the Government approval route.

(ii) The 49% limit will subsume FDI and FII/FPI investment.

(iii) The investments so made would need to comply with the relevant regulations of SEBI, such as the Issue of Capital and Disclosure Requirements (ICDR) Regulations/Substantial Acquisition of Shares and Takeovers (SAST) Regulations, as well as other applicable rules and regulations.

(iv) A Scheduled Operator’s Permit can be granted only to a company:

iv.a) that is registered and has its principal place of business within India;

iv.b) the Chairman and at least two-thirds of the Directors of which are citizens of India; and

iv.c) the substantial ownership and effective control of which is vested in Indian nationals.

(v) All foreign nationals likely to be associated with Indian scheduled and non-scheduled air transport services, as a result of such investment shall be cleared from security view point before deployment; and

(vi) All technical equipment that might be imported into India as a result of such investment shall require clearance from the relevant authority in the Ministry of Civil Aviation.

(i) The FDI limits/entry routes, mentioned at paragraph 5.2.9.2 (1) and 5.2.9.2 (2) above, are applicable in the situation where there is no investment by foreign airlines.

(ii) The dispensation for NRIs regarding FDI up to 100% will also continue in respect of the investment regime specified at para (c) (ii) above.

(d) In addition to the above conditions, foreign investment in M/s Air India Limited shall be subject to the following conditions: (i) Foreign investment in M/s Air India Ltd., including that of foreign airline(s), shall not exceed 49% either directly or indirectly. (ii) Substantial ownership and effective control of M/s Air India Ltd. shall continue to be vested in Indian Nationals.

Air Transport Services (Scheduled air transport services, regional air transport services)
UPTO 49%
ABOVE 49%
FDI Permitted
100
Main condition:

(a) Scheduled Air Transport Service/ Domestic Scheduled Passenger Airline

(b) Regional Air Transport Service

(c) In case of NRI, 100% FDI allowed under automatic route

Other condition:

(a) Air Transport Services would include Domestic Scheduled Passenger Airlines; Non-Scheduled Air Transport Services, helicopter and seaplane services.

(b) Foreign airlines are allowed to participate in the equity of companies operating Cargo
airlines, helicopter and seaplane services, as per the limits and entry routes mentioned
above.

(c) Foreign airlines are also allowed to invest in the capital of Indian companies, operating scheduled and non-scheduled air transport services, up to the limit of 49% of their paid-up capital. Such investment would be subject to the following conditions:

(i) It would be made under the Government approval route.

(ii) The 49% limit will subsume FDI and FII/FPI investment.

(iii) The investments so made would need to comply with the relevant regulations of SEBI, such as the Issue of Capital and Disclosure Requirements (ICDR) Regulations/Substantial Acquisition of Shares and Takeovers (SAST) Regulations, as well as other applicable rules and regulations.

(iv) A Scheduled Operator’s Permit can be granted only to a company:

iv.a) that is registered and has its principal place of business within India;

iv.b) the Chairman and at least two-thirds of the Directors of which are citizens of India; and

iv.c) the substantial ownership and effective control of which is vested in Indian nationals.

(v) All foreign nationals likely to be associated with Indian scheduled and non-scheduled air transport services, as a result of such investment shall be cleared from security view point before deployment; and

(vi) All technical equipment that might be imported into India as a result of such investment shall require clearance from the relevant authority in the Ministry of Civil Aviation.

(i) The FDI limits/entry routes, mentioned at paragraph 5.2.9.2 (1) and 5.2.9.2 (2) above, are applicable in the situation where there is no investment by foreign airlines.

(ii) The dispensation for NRIs regarding FDI up to 100% will also continue in respect of the investment regime specified at para (c) (ii) above.

(d) In addition to the above conditions, foreign investment in M/s Air India Limited shall be subject to the following conditions: (i) Foreign investment in M/s Air India Ltd., including that of foreign airline(s), shall not exceed 49% either directly or indirectly. (ii) Substantial ownership and effective control of M/s Air India Ltd. shall continue to be vested in Indian Nationals.

Airports (Greenfield & Brownfield)
100%
FDI Permitted
100
Main condition:

Greenfield and Brownfield projects

Other condition:

(a) Air Transport Services would include Domestic Scheduled Passenger Airlines; Non-Scheduled Air Transport Services, helicopter and seaplane services.

(b) Foreign airlines are allowed to participate in the equity of companies operating Cargo
airlines, helicopter and seaplane services, as per the limits and entry routes mentioned
above.

(c) Foreign airlines are also allowed to invest in the capital of Indian companies, operating scheduled and non-scheduled air transport services, up to the limit of 49% of their paid-up capital. Such investment would be subject to the following conditions:
(i) It would be made under the Government approval route.
(ii) The 49% limit will subsume FDI and FII/FPI investment.
(iii) The investments so made would need to comply with the relevant regulations of SEBI, such as the Issue of Capital and Disclosure Requirements (ICDR) Regulations/Substantial Acquisition of Shares and Takeovers (SAST) Regulations, as well as other applicable rules and regulations.
(iv) A Scheduled Operator’s Permit can be granted only to a company:
iv.a) that is registered and has its principal place of business within India;
iv.b) the Chairman and at least two-thirds of the Directors of which
are citizens of India; and
iv.c) the substantial ownership and effective control of which is vested in Indian
nationals.
(v) All foreign nationals likely to be associated with Indian scheduled and non-scheduled
air transport services, as a result of such investment shall be cleared from security view
point before deployment; and
(vi) All technical equipment that might be imported into India as a result of such investment shall require clearance from the relevant authority in the Ministry of Civil Aviation.

(i) The FDI limits/entry routes, mentioned at paragraph 5.2.9.2 (1) and 5.2.9.2 (2) above,
are applicable in the situation where there is no investment by foreign airlines.
(ii) The dispensation for NRIs regarding FDI up to 100% will also continue in respect of the investment regime specified at para (c) (ii) above.

(d) In addition to the above conditions, foreign investment in M/s Air India Limited shall be subject to the following conditions: (i) Foreign investment in M/s Air India Ltd., including that of the foreign airline(s), shall not exceed 49% either directly or indirectly. (ii) Substantial ownership and effective control of M/s Air India Ltd. shall continue to be vested in Indian Nationals.

Asset Reconstruction Companies
100%
FDI Permitted
100
Main condition:

‘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)

Other condition:

(i) Persons resident outside India can invest in the capital of Asset Reconstruction Companies (ARCs) registered with Reserve Bank of India, up to 100% on the automatic route.

(ii) Investment limit of a sponsor in the shareholding of an ARC will be governed by the provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, as amended from time to time. Similarly, investment by institutional / non-institutional investors will also be governed by the said Act, as amended from time to time.

(iii) The total shareholding of an individual FII/ FPI shall be below 10% of the total paid-up capital.

(iv) FIIs/ FPIs can invest in the Security Receipts (SRs) issued by ARCs. FIIs/FPIs may be allowed to invest up to 100 per cent of each tranche in SRs issued by ARCs, subject to directions/guidelines of Reserve Bank of India. Such investment should be within the relevant regulatory cap as applicable.

(v) All investments would be subject to provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, as amended from time to time.

Autocomponents
100%
FDI Permitted
100
Main condition:

Subject to the provisions of the FDI policy, foreign investment in ‘manufacturing’ sector is
under automatic route. Further, a manufacturer is permitted to sell its products manufactured in
India through wholesale and/or retail, including through e-commerce, without Government
approval.

Automobiles
100%
FDI Permitted
100
Main condition:

Subject to the provisions of the FDI policy, foreign investment in ‘manufacturing’ sector is
under automatic route. Further, a manufacturer is permitted to sell its products manufactured in
India through wholesale and/or retail, including through e-commerce, without Government
approval.

Banking- Private Sector
UPTO 49%
ABOVE 49%
FDI Permitted
74
Main condition:

Banking- Private Sector

Other condition:

(1) This 74% limit will include investment under the Portfolio Investment Scheme (PIS) by FIIs/ FPIs, NRIs and shares acquired prior to September 16, 2003 by erstwhile OCBs, and continue to include IPOs, Private placements, GDR /ADRs and acquisition of shares from existing shareholders.

(2) The aggregate foreign investment in a private bank from all sources will be allowed up to a maximum of 74 per cent of the paid up capital of the Bank. At all times, at least 26 per cent of the paid up capital will have to be held by residents, except in regard to a wholly-owned subsidiary of a foreign bank.

(3) The stipulations as above will be applicable to all investments in existing private sector banks also.

(4) Other conditions in respect of permissible limits under portfolio investment schemes through stock exchanges for FIIs/FPIs and NRIs, setting-up of a subsidiary by foreign banks and limits in respect of voting rights are at Annexure-9.

Bankng - Public Sector
20%
FDI Permitted
20
Main condition:

Banking- Public Sector subject to Banking Companies (Acquisition & Transfer of Undertakings) Acts 1970/80. This ceiling (20%) is also applicable to the State Bank of India and its associate Banks.

Other condition:

Nil

Biotechnology (Brownfield)
UPTO 74%
ABOVE 74%
FDI Permitted
100
Main condition:

Brownfield

Other condition:

(i) ‘Non-compete’ clause would not be allowed in automatic or government approval route except in special circumstances with the approval of the Government.

(ii) The prospective investor and the investee are required to provide a certificate along with the application for foreign investment as per Annexure-10.

(iii) Government may incorporate appropriate conditions for FDI in brownfield cases, at the time of granting approval.

(iv) FDI in brownfield pharmaceuticals, under both automatic and government approval routes, is further subject to compliance of following conditions:

(a) The production level of National List of Essential Medicines (NLEM) drugs and/or consumables and their supply to the domestic market at the time of induction of FDI, being maintained over the next five years at an absolute quantitative level. The benchmark for this level would be decided with reference to the level of production of NLEM drugs and/or consumables in the three financial years, immediately preceding the year of induction of
FDI. Of these, the highest level of production in any of these three years would be taken as the level.

(b) R&D expenses being maintained in value terms for 5 years at an absolute quantitative level at the time of induction of FDI. The benchmark for this level would be another article with reference to the highest level of R&D expenses which has been incurred in any of the three financial years immediately preceding the year of induction of FDI.

(c) The administrative Ministry will above-mentioned complete information pertaining to the transfer of technology, if any, along with induction of foreign investment into the investee company.

(d) The administrative Ministry (s) i.e. Ministry of Health and Family Welfare, Department of Pharmaceuticals or any other regulatory Agency/Development as notified by Central Government from time to time, will monitor the compliance of conditionalities.

Note:

i. FDI up to 100%, under the automatic route is permitted for manufacturing of medical devices. The above mentioned conditions will, therefore, not be applicable to greenfield as well as brownfield projects of this industry.

ii. Medical device means (a) Any instrument, apparatus, appliance, implant, material or another article, whether used alone or in combination, including the software, intended by its manufacturer to be used especially for human beings or animals for one or more of the specific purposes of:
(aa) Diagnosis, prevention, monitoring, treatment or alleviation of any disease or disorder;

(ab) diagnosis, monitoring, treatment, alleviation of, or assistance for, any injury or disability;

(ac) the investigation, replacement or modification or support of the anatomy or of a physiological process;

(ad) supporting or sustaining life;

(ae) disinfection of medical devices;

(af) control of conception; and which does not achieve its primary intended action in or on the human body or animals by any pharmacological or  immunological or metabolic means, but which may be assisted in its intended function by such means;   

(b) an accessory to such an instrument, apparatus, appliance, material or another article; 

(c) in-vitro diagnostic device which is a reagent, reagent product, calibrator, control material, kit, instrument, apparatus, equipment or system, whether used alone or in combination thereof intended to be used for examination and providing information for medical or diagnostic purposes by means of examination of specimens derived from the human bodies or animals.

Biotechnology (Greenfield)
100%
FDI Permitted
100
Main condition:

Greenfield projects

Other condition:

Nil

Broadcast Content Services (Up-linking of Non-‘News & Current Affairs’ TV Channels/ Down-linking of TV Channels)
100%
FDI Permitted
100
Main condition:

Up-linking of Non-‘News & Current Affairs’ TV Channels/ Down-linking of TV Channels

Other condition:

Nil

Broadcasting Carriage Services
100%
FDI Permitted
100
Main condition:

(a)Teleports (setting up of up-linking HUBs/Teleports);

(b) Direct to Home (DTH);

(c) Cable Networks (Multi System operators (MSOs) operating at National or State or District level and undertaking upgradation of networks towards digitalization
and addressability);

(d) Mobile TV;

(e) Headend-in-the Sky Broadcasting Service(HITS)

(f) Cable Networks (Other MSOs not undertaking upgradation of networks towards digitalization and addressability and Local Cable Operators (LCOs))

Other condition:

Infusion of fresh foreign investment, beyond 49% in a company not seeking license/permission from sectoral Ministry, resulting in the change in the ownership pattern or transfer of stake by existing investor to new foreign investor, will require Government approval.

Broadcasting Content Services
49%
FDI Permitted
49
Main condition:

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

Other condition:

1. Broadcasting Content Services (uplinking of 'news and current affairs' TV channel)

2. Broadcasting Content Services (FM)

Detailed guidelines on the Broadcasting Sector are given in Annexure-7

Capital Goods
100%
FDI Permitted
100
Main condition:

Subject to the provisions of the FDI policy, foreign investment in ‘manufacturing’ sector is
under automatic route. Further, a manufacturer is permitted to sell its products manufactured in
India through wholesale and/or retail, including through e-commerce, without Government
approval.

Cash & Carry Wholesale Trading/Wholesale Trading (including sourcing from MSEs)
100%
FDI Permitted
100
Main condition:

Cash & Carry Wholesale Trading/Wholesale Trading (including sourcing from MSEs)

Other condition:

Guidelines for Cash & Carry Wholesale Trading/Wholesale Trading (WT):

(a) For undertaking WT, requisite licenses/registration/ permits, as specified under the relevant Acts/Regulations/Rules/Orders of the State Government/Government Body/Government Authority/Local Self-Government Body under that State Government should be obtained.

(b) Except in case of sales to Government, sales made by the wholesaler would be considered as ‘cash & carry wholesale trading/wholesale trading’ with valid business customers, only when WT are made to the following entities:

(i) Entities holding sales tax/ VAT registration/service tax/excise duty registration; or

(ii) Entities holding trade licenses i.e. a license/registration certificate/membership certificate/registration under Shops and Establishment Act, issued by a Government Authority/Government Body/Local Self-Government Authority, reflecting that the entity/person holding the license/ registration certificate/ membership certificate, as the case may be, is itself/ himself/herself engaged in a business involving commercial activity; or

(iii) Entities holding permits/license etc. for undertaking retail trade (like tehbazari and similar license for hawkers) from Government Authorities/Local Self Government Bodies; or

(iv) Institutions having certificate of incorporation or registration as a society or registration as public trust for their self consumption.

Note: An entity, to whom WT is made, may fulfill any one of the 4 conditions.

(c) Full records indicating all the details of such sales like name of entity, kind of entity, registration/license/permit etc. number, amount of sale etc. should be maintained on a day to day basis.

(d) WT of goods would be permitted among companies of the same group. However, such WT to group companies taken together should not exceed 25% of the total turnover of the wholesale venture.

(e) WT can be undertaken as per normal business practice, including extending credit facilities subject to applicable regulations.

(f) A wholesale/cash & carry trader can undertake retail trading, subject to the conditions as applicable. An entity undertaking wholesale/cash and carry as well as retail business will be mandated to maintain separate books of accounts for these two arms of the business and duly audited by the statutory auditors. Conditions of the FDI policy for wholesale/cash and carry business and for retail business have to be separately complied with by the respective business arms.

Chemicals
100%
FDI Permitted
100
Main condition:

Subject to the provisions of the FDI policy, foreign investment in ‘manufacturing’ sector is under automatic route. Further, a manufacturer is permitted to sell its products manufactured in India through wholesale and/or retail, including through e-commerce, without Government approval.

Coal & Lignite
100%
FDI Permitted
100
Main condition:

(a) 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 of Coal Mines (Nationalization) Act, 1973.

(b) 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.

Other condition:

(a) FDI for separation of titanium bearing minerals & ores will be subject to the following
additional conditions viz.:
(i) value addition facilities are set up within India along with transfer of technology;
(ii) disposal of tailings during the mineral separation shall be carried out in accordance with regulations framed by the Atomic Energy Regulatory Board such as Atomic Energy (Radiation Protection) Rules, 2004 and the Atomic Energy (Safe Disposal of Radioactive
Wastes) Rules, 1987.

(b) FDI will not be allowed in mining of “prescribed substances” listed in the Notification No.
S.O. 61(E), dated 18.1.2006, issued by the Department of Atomic Energy.

Construction Development: Townships, Housing, Built-up Infrastructure
100%
FDI Permitted
100
Main condition:

Construction-development projects (which would include development of townships, construction of residential/ commercial premises, roads or bridges, hotels, resorts, hospitals, educational institutions, recreational facilities, city and regional level infrastructure, townships)

Other condition:

(i) It is clarified that FDI is not permitted in an entity which is engaged or proposes to engage in real estate business, construction of farm houses and trading in transferable development rights (TDRs). “Real estate business” means dealing in land and immovable property with a view to earning profit there from and does not include development of townships, construction of residential/ commercial premises, roads or bridges, educational institutions, recreational facilities, city and regional level infrastructure, townships. Further, earning of rent/ income on lease of the property, not amounting to transfer, will not amount to real estate business.

(ii) Condition of lock-in period at (A) above will not apply to Hotels &Tourist Resorts, Hospitals, Special Economic Zones (SEZs), Educational Institutions, Old Age Homes and investment by NRIs.

(iii) Completion of the project will be determined as per the local bye-laws/rules and other
regulations of State Governments.

(iv) It is clarified that 100% FDI under automatic route is permitted in completed projects for operation and management of townships, malls/ shopping complexes and business centres. Consequent to foreign investment, transfer of ownership and/or control of the investee company from residents to non-residents is also permitted. However, there would be a locking-period of three years, calculated with reference to each tranche of FDI, and transfer of immovable property or part thereof is not permitted during this period.

Note: Notwithstanding anything contained in the above paragraph, it is clarified that real estate broking service does not amount to real estate business and 100% foreign investment is allowed in the activity under automatic route

(v) “Transfer", in relation to FDI policy on the sector, includes,—

(a) the sale, exchange or relinquishment of the asset; or

(b) the extinguishment of any rights therein; or

(c) the compulsory acquisition thereof under any law; or

(d) any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract of nature referred to in section 53A of the Transfer of Property Act, 1882 (4 of 1882); or

(e) any transaction, by acquiring shares in a company or by way of any agreement or any arrangement or in any other manner whatsoever, which has the effect of transferring, or enabling the enjoyment of, any immovable property.

Construction of Hospitals
100%
FDI Permitted
100
Main condition:

a) Each phase of the construction development project would be considered as a separate project.

(b) The investor will be permitted to exit on completion of the project or after the development of trunk infrastructure i.e. roads, water supply, street lighting, drainage, and sewerage.

(c) Notwithstanding anything contained at (b) above, a person resident outside India will be permitted to exit and repatriate foreign investment before the completion of a project under automatic route, provided that a lock-in-period of three years, calculated with reference to each tranche of foreign investment has been completed. Further, transfer of stake from a person resident outside India to another person resident outside India, without repatriation of foreign investment will neither be subject to any lock-in period nor to any government approval.

(d) The project shall conform to the norms and standards, including land use requirements and provision of community amenities and common facilities, as laid down in the applicable building control regulations, bye-laws, rules, and other regulations of the State Government/ Municipal/ Local Body concerned.

(e) The Indian investee company will be permitted to sell only developed plots. For the purposes of this policy "developed plots" will mean plots where trunk infrastructure i.e. roads, water supply, street lighting, drainage, and sewerage, have been made available.

(f) The Indian investee company shall be responsible for obtaining all necessary approvals, including those of the building/ layout plans, developing internal and peripheral areas and other infrastructure facilities, payment of development, external development and other charges and complying with all other requirements as prescribed under applicable rules/ bye-laws/ regulations of the State Government/ Municipal/ Local Body concerned.

(g) The State Government/ Municipal/ Local Body concerned, which approves the building/ development plans, will monitor compliance of the above conditions by the developer.

Other condition:

Note:

(1) Foreign investment is not permitted in an entity which is engaged or proposes to engage in real estate business, construction of farmhouses and trading in transferable development rights (TDRs).

(2) The condition of the lock-in period will not apply to Hotels and Tourist Resorts, Hospitals, Special Economic Zones (SEZs), Educational Institutions, Old Age Homes and investment by NRIs/ OCIs.

(3) Completion of the project will be determined as per the local bye-laws/ rules and other regulations of State Governments.

(4) Foreign investment up to 100 percent under automatic route is permitted in completed projects for operating and managing townships, malls/ shopping complexes and business centres. Consequent to such foreign investment, transfer of ownership and/ or control of the investee company from persons resident in India to persons resident outside India is also permitted. However, there would be a lock-in-period of three years, calculated with reference to each tranche of foreign investment and transfer of immovable property or part thereof is not permitted during this period.

(5) "Transfer", in relation to this sector, includes,-

a. the sale, exchange or relinquishment of the asset; or

b. the extinguishment of any rights therein; or

c. the compulsory acquisition thereof under any law; or

d. any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 (4 of 1882) ; or

e. any transaction, by acquiring capital instruments in a company or by way of any agreement or any arrangement or in any other manner whatsoever, which has the effect of transferring, or enabling the enjoyment of, any immovable property.

(6) ‘Real estate business’ means dealing in land and immovable property with a view to earning profit therefrom and does not include development of townships, construction of residential/ commercial premises, roads or bridges, educational institutions, recreational facilities, city and regional level infrastructure, townships;

Explanation:

a. Investment in units of Real Estate Investment Trusts (REITs) registered and regulated under the Securities and Exchange Board of India (REITs) regulations 2014 shall also be excluded from the definition of “real estate business”.

b. Earning of rent income on the lease of the property, not amounting to transfer will not amount to real estate business.

c. Transfer in relation to real estate includes,

(i) the sale, exchange or relinquishment of the asset; or

(ii) the extinguishment of any rights therein; or

(iii) the compulsory acquisition thereof under any law; or

(iv) any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 (4 of 1882); or

(v) any transaction, by acquiring capital instruments in a company or by way of any agreement or any arrangement or in any other manner whatsoever, which has the effect of transferring, or enabling the enjoyment of, any immovable property.

(7) Real estate broking services shall be excluded from the definition of “real estate business” and 100% foreign investment is allowed in real estate broking services under the automatic route.

[Source: Para 5.2.10 of the Consolidated FDI Policy]

Core Investment Company
100%
FDI Permitted
100
Main condition:

Core Investment Company have to additionally follow RBI’s framework.

Other condition:

Nil

Credit Information Companies (CIC)
100%
FDI Permitted
100
Main condition:

Credit Information Companies

Other condition:

(1) Foreign investment in Credit Information Companies is subject to the Credit Information Companies (Regulation) Act, 2005.

(2) Foreign investment is permitted subject to regulatory clearance from RBI.

(3) Such FII/FPI investment would be permitted subject to the conditions that:

(a) A single entity should directly or indirectly hold below 10% equity.

(b) Any acquisition in excess of 1% will have to be reported to RBI as a mandatory requirement; and

(c) FIIs/FPIs investing in CICs shall not seek a representation on the Board of Directors based upon their shareholding.

Defence
UPTO 49%
ABOVE 49%
FDI Permitted
100
Main condition:

Defence Industry subject to Industrial license under the Industries (Development & Regulation) Act, 1951; and Manufacturing of small arms and ammunition under the Arms Act, 1959

Other condition:

(a) Infusion of fresh foreign investment within the permitted automatic route level, in a company not seeking industrial license, resulting in change in the ownership pattern or transfer of stake by existing investor to new foreign investor, will require Government approval.
(b) Licence applications will be considered and licences given by the Department of Industrial Policy & Promotion, Ministry of Commerce & Industry, in consultation with Ministry of Defence and Ministry of External Affairs.
(c) Foreign investment in the sector is subject to security clearance and guidelines of the M/o Defence.
(d) Investee company should be structured to be self-sufficient in areas of product design and development. The investee/joint venture company along with manufacturing facility, should also have maintenance and life cycle support facility of the product being manufactured in India.

Duty Free Shops
100%
FDI Permitted
100
Main condition:

(i) Duty Free Shops would mean shops set up in custom bonded area at International Airports/International Seaports and Land Custom Stations where there is transit of international passengers.

(ii) Foreign investment in Duty Free Shops is subject to compliance of conditions stipulated under the Customs Act, 1962 and other laws, rules and regulations.

(iii) Duty Free Shop entity shall not engage into any retail trading activity in the Domestic Tariff Area of the country

Other condition:

Nil

E-commerce activities
100%
FDI Permitted
100
Main condition:

Guidelines for Foreign Direct Investment on e-commerce sector

i) 100% FDI under automatic route is permitted in marketplace model of e-commerce.

ii) FDI is not permitted in inventory based model of e-commerce

Other condition:

i) Digital & electronic network will include network of computers, television channels and any other internet application used in automated manner such as web pages, extranets, mobiles etc.

ii) Marketplace e-commerce entity will be permitted to enter into transactions with sellers registered on its platform on B2B basis.

iii) E-commerce marketplace may provide support services to sellers in respect of warehousing, logistics, order fulfillment, call centre, payment collection and other services.

iv) E-commerce entity providing a marketplace will not exercise ownership over the inventory i.e. goods purported to be sold. Such an ownership over the inventory will render the business into inventory based model.

v) An e-commerce entity will not permit more than 25% of the sales value on financial year basis affected through its marketplace from one vendor or their group companies.

vi) In marketplace model goods/services made available for sale electronically on website should clearly provide name, address and other contact details of the seller. Post sales, delivery of goods to the customers and customer satisfaction will be responsibility of the seller.

vii) In marketplace model, payments for sale may be facilitated by the e-commerce entity in conformity with the guidelines of the Reserve Bank of India.

viii) In marketplace model, any warrantee/ guarantee of goods and services sold will be responsibility of the seller.

ix) E-commerce entities providing marketplace will not directly or indirectly influence the sale price of goods or services and shall maintain level playing field.

x) Guidelines on cash and carry wholesale trading as given in para 5.2.15.1.2 above will apply on B2B e-commerce. Subject to the conditions of FDI policy on services sector and applicable laws/regulations,
security and other conditionalities, sale of services through e-commerce will be under automatic
route.

Electronic Systems
100%
FDI Permitted
100
Main condition:

Subject to the provisions of the FDI policy, foreign investment in ‘manufacturing’ sector is
under automatic route. Further, a manufacturer is permitted to sell its products manufactured in
India through wholesale and/or retail, including through e-commerce, without Government
approval.

Food Processing
100%
FDI Permitted
100
Main condition:

Subject to the provisions of the FDI policy, foreign investment in ‘manufacturing’ sector is under automatic route. Further, a manufacturer is permitted to sell its products manufactured in India through wholesale and/or retail, including through e-commerce, without Government approval.

Food Products Retail Trading
100%
FDI Permitted
100
Main condition:

The food products should be manufactured and/or produced in India.

Other condition:

Nil

Gems & Jewellery (Manufacturing)
100%
FDI Permitted
100
Main condition:

Subject to the provisions of the FDI policy, foreign investment in ‘manufacturing’ sector is
under automatic route. Further, a manufacturer is permitted to sell its products manufactured in
India through wholesale and/or retail, including through e-commerce, without Government
approval.

Healthcare (Brownfield)
UPTO 74%
ABOVE 74%
FDI Permitted
100
Main condition:

a) 'Non-compete' clause would not be allowed except in special circumstances with the Government approval.

(b) The prospective investor and the prospective investee are required to provide a certificate given at 16.4 along with the application submitted for Government approval.

(c) Government approval may incorporate appropriate conditions for foreign investment in brownfield cases.

(d) Foreign investment in brownfield pharmaceuticals, irrespective of entry route, is further subject to the following conditions

(i) The production level of National List of Essential Medicines (NLEM) drugs and/ or consumables and their supply to the domestic market at the time of induction of foreign investment, being maintained over the next five years at an absolute quantitative level. The benchmark for this level would be decided with reference to the level of production of NLEM drugs and/ or consumables in the three financial years, immediately preceding the year of induction of foreign investment. Of these, the highest level of production in any of these three years would be taken as the level.

(ii) Research and Development (R&D) expenses being maintained in value terms for 5 years at an absolute quantitative level at the time of induction of foreign investment. The benchmark for this level would be decided with reference to the highest level of R&D expenses which has been incurred in any of the three financial years immediately preceding the year of induction of foreign investment.

(iii) The administrative Ministry will be provided complete information pertaining to the transfer of technology, if any, along with the induction of foreign investment into the investee company.

(iv) The administrative Ministry (s) i.e. Ministry of Health and Family Welfare, Department of Pharmaceuticals or any other regulatory Agency/Development as notified by Central Government from time to time, will monitor the compliance of conditionalities.

[Source: Para 5.2.27 of the FDI Policy]

Healthcare (Greenfield)
100%
FDI Permitted
100
Main condition:

100% FDI is permitted under the automatic route. No prior government approval is required.

Industrial Parks (new and existing)
100%
FDI Permitted
100
Main condition:

Industrial Parks -new and existing

Other condition:

Other conditions for investment in Industrial Parks are at Annexure-8.

Infrastructure Company in the Securities Market
49%
FDI Permitted
49
Main condition:

Infrastructure companies in Securities Markets, namely, stock exchanges, commodity exchanges, depositories and clearing corporations, in compliance with SEBI Regulations

Other condition:

(i) Foreign investment, including investment by FPIs, will be subject to the Securities Contracts (Regulations) (Stock Exchanges and Clearing Corporations) Regulations 2012, and Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996 as amended from time to time, and other Guidelines/Regulations issued by the Central Government, SEBI and the Reserve Bank of India from time to time.

(ii) Words and expressions used herein and not defined in these regulations but defined in the Companies Act, 2013 (18 of 2013) or the Securities Contracts (Regulation) Act, 1956 (42 of 1956) or the Securities and Exchange Board of India Act, 1992 (15 of 1992) or the Depositories Act, 1996 (22 of 1996) or in the concerned Regulations issued by SEBI shall have the same meanings respectively assigned to them in those Acts/ Regulations.

Insurance
UPTO 49%
FDI Permitted
49
Main condition:

(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)

Other condition:

(a) No Indian Insurance company shall allow the aggregate holdings by way of total foreign investment in its equity shares by foreign investors, including portfolio investors, to exceed forty-nine percent of the paid up equity capital of such Indian Insurance company.

(b) The foreign investment up to forty-nine percent of the total paid-up equity of the Indian Insurance Company shall be allowed on the automatic route subject to approval/verification by the Insurance Regulatory and Development Authority of India.

(c) Foreign investment in this sector shall be subject to compliance with the provisions of the Insurance Act, 1938 and the condition that Companies receiving FDI shall obtain necessary license /approval from the Insurance Regulatory & Development Authority of India for undertaking insurance and related activities.

(d) An Indian Insurance company shall ensure that its ownership and control remains at all times in the hands of resident Indian entities as determined by Department of Financial Services/ Insurance Regulatory and Development Authority of India as per the rules/regulation issued by them from time to time.

(e) Foreign portfolio investment in an Indian Insurance company shall be governed by the provisions contained in sub-regulations (2), (2A), (3) and (8) of Regulation 5 of FEMA Regulations, 2000 and provisions of the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014.

(f) Any increase in foreign investment in an Indian Insurance company shall be in accordance with the pricing guidelines specified by Reserve Bank of India under the FEMA Regulations.

(g) The foreign equity investment cap of 49 percent shall apply on the same terms as above to Insurance Brokers, Third Party Administrators, Surveyors and Loss Assessors and Other Insurance Intermediaries appointed under the provisions of the Insurance Regulatory and Development Authority Act,1999 (41 of 1999).
(h) Provided that where an entity like a bank, whose primary business is outside the insurance area, is allowed by the Insurance Regulatory and Development Authority of India to function as an insurance intermediary, the foreign equity investment caps applicable in that sector shall continue to apply, subject to the condition that the revenues of such entities from their primary (i.e., non-insurance related) business must remain above 50 percent of their total revenues in any financial year.

(i) The provisions of paragraphs (i) (b) and (d) of Annexure 9 relating to ‘Banking-Private Sector’, shall be applicable in respect of bank promoted insurance companies.

(j) Terms ‘Control’, ‘Equity Share Capital’, ‘Foreign Direct Investment’ (FDI), ‘Foreign Investors’, ‘Foreign Portfolio Investment’, ‘Indian Insurance Company’, ‘Indian Company’, ‘Indian Control of an Indian Insurance Company’, ‘Indian Ownership’, ‘Non-resident Entity’, ‘Public Financial Institution’, ‘Resident Indian Citizen’, ‘Total Foreign Investment’ will have the same meaning as provided in Notification No. G.S.R 115 (E), dated 19th February, 2015
issued by Department of Financial Services and regulations issued by Insurance Regulatory and Development Authority of India from time to time.

IT and BPM
100%
FDI Permitted
100
Main condition:

FDI is permitted up to 100% on the automatic route, subject to applicable laws/regulations; security and other conditionalities.

Leather
100%
FDI Permitted
100
Main condition:

Subject to the provisions of the FDI policy, foreign investment in ‘manufacturing’ sector is
under automatic route. Further, a manufacturer is permitted to sell its products manufactured in
India through wholesale and/or retail, including through e-commerce, without Government
approval.

Manufacturing
100%
FDI Permitted
100
Main condition:

Subject to the provisions of the FDI policy, foreign investment in ‘manufacturing’ sector is under automatic route. Further, a manufacturer is permitted to sell its products manufactured in India through wholesale and/or retail, including through e-commerce, without Government approval.

Other condition:

Nil

Medical Devices
UPTO 100%
FDI Permitted
100
Main condition:

FDI up to 100% is allowed in manufacturing of the medical devices under the automatic route.

Other condition:

Nil

Mining and Exploration of metal and non-metal ores
100%
FDI Permitted
100
Main condition:

Including diamond, gold, silver and precious ores but excluding titanium bearing minerals and its ores; subject to the Mines and Minerals (Development & Regulation) Act, 1957

Other condition:

(a) FDI for separation of titanium bearing minerals & ores will be subject to the following additional conditions viz.:
(i) value addition facilities are set up within India along with transfer of technology;
(ii) disposal of tailings during the mineral separation shall be carried out in accordance with regulations framed by the Atomic Energy Regulatory Board such as Atomic Energy (Radiation Protection) Rules, 2004 and the Atomic Energy (Safe Disposal of Radioactive Wastes) Rules, 1987.

(b) FDI will not be allowed in mining of “prescribed substances” listed in the Notification No. S.O. 61(E), dated 18.1.2006, issued by the Department of Atomic Energy.

Mining and mineral separation of titanium bearing minerals and ores, its value addition and integrated activities
100%
FDI Permitted
100
Main condition:

Mining and mineral separation of titanium bearing minerals & ores, its value addition and integrated activities subject to sectoral regulations and the Mines and Minerals (Development and Regulation Act 1957).

 

Other condition:

(a) FDI for separation of titanium bearing minerals & ores will be subject to the following
additional conditions viz.:
(i) value addition facilities are set up within India along with transfer of technology;
(ii) disposal of tailings during the mineral separation shall be carried out in accordance with regulations framed by the Atomic Energy Regulatory Board such as Atomic Energy (Radiation Protection) Rules, 2004 and the Atomic Energy (Safe Disposal of Radioactive
Wastes) Rules, 1987.

(b) FDI will not be allowed in mining of “prescribed substances” listed in the Notification No.
S.O. 61(E), dated 18.1.2006, issued by the Department of Atomic Energy.

Multi Brand Retail Trading
51%
FDI Permitted
51
Main condition:

(1) FDI in multi brand retail trading, in all products, will be permitted, subject to the following conditions:

(i) Fresh agricultural produce, including fruits, vegetables, flowers, grains, pulses, fresh poultry, fishery and meat products, may be unbranded.

(ii) Minimum amount to be brought in, as FDI, by the foreign investor, would be US $ 100 million.

(iii) At least 50% of total FDI brought in the first tranche of US $ 100 million, shall be invested in 'back-end infrastructure' within three years, where ‘back-end infrastructure’ will include capital expenditure on all activities, excluding that on front end units; for instance, back-end infrastructure will include investment made towards processing, manufacturing, distribution, design improvement, quality control, packaging, logistics, storage, ware-house, agriculture market produce infrastructure etc. Expenditure on land cost and rentals, if any, will not be counted for purposes of backend infrastructure. Subsequent investment in backend infrastructure would be made by the MBRT retailer as needed, depending upon its business requirements.

(iv) At least 30% of the value of procurement of manufactured/processed products purchased shall be sourced from Indian micro, small and medium industries, which have a total investment in plant & machinery not exceeding US $ 2.00 million. This valuation refers to the value at the time of installation, without providing for depreciation. The ‘small industry’ status would be reckoned only at the time of first engagement with the retailer, and such industry shall continue to qualify as a ‘small industry’ for this purpose, even if it outgrows the said investment of US $ 2.00 million during the course of its relationship with the said retailer. Sourcing from agricultural co-operatives and farmers co-operatives would also be considered in this category. The procurement requirement would have to be met, in the first instance, as an average of five years’ total value of the manufactured/processed products purchased, beginning 1st April of the year during which the first tranche of FDI is received. Thereafter, it would have to be met on an annual basis.

(v) Self-certification by the company, to ensure compliance of the conditions at serial nos. (ii), (iii) and (iv) above, which could be cross-checked, as and when required. Accordingly, the investors shall maintain accounts, duly certified by statutory auditors.

(vi) Retail sales outlets may be set up only in cities with a population of more than 10 lakh as per 2011 Census or any other cities as per the decision of the respective State Governments, and may also cover an area of 10 kms around the municipal/urban agglomeration limits of such cities; retail locations will be restricted to conforming areas as per the Master/Zonal Plans of the concerned cities and provision will be made for requisite facilities such as transport connectivity and parking.

(vii) Government will have the first right to procurement of agricultural products.

(viii) The above policy is an enabling policy only and the State Governments/Union Territories would be free to take their own decisions in regard to implementation of the policy. Therefore, retail sales outlets may be set up in those States/Union Territories which have agreed, or agree in future, to allow FDI in MBRT under this policy. The list of States/Union Territories which have conveyed their agreement is at

(2) below. Such agreement, in future, to permit establishment of retail outlets under this policy, would be conveyed to the Government of India through the Department of Industrial Policy & Promotion and additions would be made to the list at (2) below accordingly. The establishment of the retail sales outlets will be in compliance of applicable State/Union Territory laws/ regulations, such as the Shops and
Establishments Act etc.

(ix) Retail trading, in any form, by means of e-commerce, would not be permissible, for companies with FDI, engaged in the activity of multi-brand retail trading.

(2) List of States/Union Territories as mentioned in Paragraph 5.2.15.4(1)(viii)
1.Andhra Pradesh
2.Assam
3.Delhi
4.Haryana
5.Himachal Pradesh
6.Jammu & Kashmir
7. Karnataka
8.Maharashtra
9.Manipur
10. Rajasthan
11. Uttarakhand
12. Daman & Diu and Dadra and Nagar Haveli (Union Territories)

Other condition:

Nil

Other Financial Services
100%
FDI Permitted
100
Main condition:

Financial Services activities regulated by financial sector regulators, viz., RBI, SEBI, IRDA, PFRDA, NHB or any other financial sector regulator as may be notified by the Government of India.

Other condition:

i. Foreign investment in 'Other Financial Services' activities shall be subject to conditionalities, including minimum capitalization norms, as specified by the concerned Regulator/Government Agency.

ii. ‘Other Financial Services' activities need to be regulated by one of the Financial Sector Regulators. In all such financial services activity 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, foreign investment up to 100% will be allowed under Government approval route subject to conditions including minimum capitalization requirement, as may be decided by the Government.

iiii. Any activity which is specifically regulated by an Act, the foreign investment limits will be restricted to those levels/limit that may be specified in that Act, if so mentioned.

iv. Downstream investments by any of these entities engaged in "Other Financial Services" will be subject to the extant sectoral regulations and provisions of Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000, as amended from time to time.

Other services under Civil Aviation sector (Maintenance and Repair organizations; flying training institutes; and technical training institutions.)
100%
FDI Permitted
100
Main condition:

Maintenance and Repair organizations; flying training institutes; and technical training institutions.

Other condition:

(a) Air Transport Services would include Domestic Scheduled Passenger Airlines; Non-Scheduled Air Transport Services, helicopter and seaplane services.

(b) Foreign airlines are allowed to participate in the equity of companies operating Cargo airlines, helicopter and seaplane services, as per the limits and entry routes mentioned above.

(c) Foreign airlines are also allowed to invest in the capital of Indian companies, operating scheduled and non-scheduled air transport services, up to the limit of 49% of their paid-up capital. Such investment would be subject to the following conditions:

(i) It would be made under the Government approval route.

(ii) The 49% limit will subsume FDI and FII/FPI investment.

(iii) The investments so made would need to comply with the relevant regulations of SEBI, such as the Issue of Capital and Disclosure Requirements (ICDR) Regulations/Substantial Acquisition of Shares and Takeovers (SAST) Regulations, as well as other applicable rules and regulations.

(iv) A Scheduled Operator’s Permit can be granted only to a company:

iv.a) that is registered and has its principal place of business within India;

iv.b) the Chairman and at least two-thirds of the Directors of which are citizens of India; and

iv.c) the substantial ownership and effective control of which is vested in Indian nationals.

(v) All foreign nationals likely to be associated with Indian scheduled and non-scheduled air transport services, as a result of such investment shall be cleared from security view point before deployment; and

(vi) All technical equipment that might be imported into India as a result of such investment shall require clearance from the relevant authority in the Ministry of Civil Aviation.

(i) The FDI limits/entry routes, mentioned at paragraph 5.2.9.2 (1) and 5.2.9.2 (2) above, are applicable in the situation where there is no investment by foreign airlines.

(ii) The dispensation for NRIs regarding FDI up to 100% will also continue in respect of the investment regime specified at para (c) (ii) above.

(d) In addition to the above conditions, foreign investment in M/s Air India Limited shall be subject to the following conditions: (i) Foreign investment in M/s Air India Ltd., including that of foreign airline(s), shall not exceed 49% either directly or indirectly. (ii) Substantial ownership and effective control of M/s Air India Ltd. shall continue to be vested in Indian Nationals.

Other services under Civil Aviation sector (Ground Handling Services subject to sectoral regulations and security clearance)
100%
FDI Permitted
100
Main condition:

Ground Handling Services subject to sectoral regulations and security clearance

Other condition:

(a) Air Transport Services would include Domestic Scheduled Passenger Airlines; Non-Scheduled Air Transport Services, helicopter and seaplane services.

(b) Foreign airlines are allowed to participate in the equity of companies operating Cargo airlines, helicopter and seaplane services, as per the limits and entry routes mentioned above.

(c) Foreign airlines are also allowed to invest in the capital of Indian companies, operating scheduled and non-scheduled air transport services, up to the limit of 49% of their paid-up capital. Such investment would be subject to the following conditions:

(i) It would be made under the Government approval route.

(ii) The 49% limit will subsume FDI and FII/FPI investment.

(iii) The investments so made would need to comply with the relevant regulations of SEBI, such as the Issue of Capital and Disclosure Requirements (ICDR) Regulations/Substantial Acquisition of Shares and Takeovers (SAST) Regulations, as well as other applicable rules and regulations.

(iv) A Scheduled Operator’s Permit can be granted only to a company:

iv.a) that is registered and has its principal place of business within India;

iv.b) the Chairman and at least two-thirds of the Directors of which are citizens of India and

iv.c) the substantial ownership and effective control of which is vested in Indian nationals.

(v) All foreign nationals likely to be associated with Indian scheduled and non-scheduled air transport services, as a result of such investment shall be cleared from security viewpoint before deployment; and

(vi) All technical equipment that might be imported into India as a result of such investment shall require clearance from the relevant authority in the Ministry of Civil Aviation.

(i) The FDI limits/entry routes, mentioned at paragraph 5.2.9.2 (1) and 5.2.9.2 (2) above, are applicable in the situation where there is no investment by foreign airlines.

(ii) The dispensation for NRIs regarding FDI up to 100% will also continue in respect of the investment regime specified at para (c) (ii) above.

(d) In addition to the above conditions, foreign investment in M/s Air India Limited shall be subject to the following conditions: (i) Foreign investment in M/s Air India Ltd., including that of the foreign airline(s), shall not exceed 49% either directly or indirectly. (ii) Substantial ownership and effective control of M/s Air India Ltd. shall continue to be vested in Indian Nationals.

Pension
49%
FDI Permitted
49
Main condition:

Pension

Other condition:

(i) Foreign investment in the Pension Funds is allowed as per the Pension Fund Regulatory and Development Authority (PFRDA) Act, 2013.

(ii) Foreign Investment in Pension Funds will be subject to the condition that entities bringing in foreign equity investment as per Section 24 of the PFRDA Act shall obtain necessary registration from the Pension Fund Regulatory and Development Authority and comply with other requirements as per the PFRDA Act, 2013 and Rules and Regulations framed under it for so participating in Pension Fund Management activities in India.

(iii) An Indian pension fund shall ensure that its ownership and control remains at all times in the hands of resident Indian entities as determined by the Government of India/PFRDA as per the rules/regulation issued by them from time to time.

Petroleum & Natural Gas
100%
FDI Permitted
100
Main condition:

Exploration activities of oil and natural gas fields, infrastructure related to marketing of petroleum products and natural gas, marketing of natural gas and petroleum products, petroleum product pipelines, natural gas/pipelines, LNG Regasification infrastructure, market study and formulation and Petroleum refining in the private sector, subject to the existing sectoral policy and regulatory framework in the oil marketing sector and the policy of the Government on private participation in exploration of oil and the discovered fields of national oil companies.

Petroleum Refining (by PSUs)
49%
FDI Permitted
49
Main condition:

Petroleum refining by the Public Sector Undertakings (PSU), without any disinvestment or dilution of domestic equity in the existing PSUs

Pharmaceuticals (Brownfield)
UPTO 74%
ABOVE 74%
FDI Permitted
100
Main condition:

Brownfield

Other condition:

(i) ‘Non-compete’ clause would not be allowed in automatic or government approval route except in special circumstances with the approval of the Government.

(ii) The prospective investor and the investee are required to provide a certificate along with the application for foreign investment as per Annexure-10.

(iii) Government may incorporate appropriate conditions for FDI in brownfield cases, at the time of granting approval.

(iv) FDI in brownfield pharmaceuticals, under both automatic and government approval routes, is further subject to compliance of following conditions:

(a) The production level of National List of Essential Medicines (NLEM) drugs and/or consumables and their supply to the domestic market at the time of induction of FDI, being maintained over the next five years at an absolute quantitative level. The benchmark for this level would be decided with reference to the level of production of NLEM drugs and/or consumables in the three financial years, immediately preceding the year of induction of
FDI. Of these, the highest level of production in any of these three years would be taken as the level.

(b) R&D expenses being maintained in value terms for 5 years at an absolute quantitative level at the time of induction of FDI. The benchmark for this level would be another article with reference to the highest level of R&D expenses which has been incurred in any of the three financial years immediately preceding the year of induction of FDI.

(c) The administrative Ministry will above-mentioned complete information pertaining to the transfer of technology, if any, along with induction of foreign investment into the investee company.

(d) The administrative Ministry (s) i.e. Ministry of Health and Family Welfare, Department of Pharmaceuticals or any other regulatory Agency/Development as notified by Central Government from time to time, will monitor the compliance of conditionalities.

Note:

i. FDI up to 100%, under the automatic route is permitted for manufacturing of medical devices. The above mentioned conditions will, therefore, not be applicable to greenfield as well as brownfield projects of this industry.

ii. Medical device means (a) Any instrument, apparatus, appliance, implant, material or another article, whether used alone or in combination, including the software, intended by its manufacturer to be used especially for human beings or animals for one or more of the specific purposes of:
(aa) Diagnosis, prevention, monitoring, treatment or alleviation of any disease or disorder;

(ab) diagnosis, monitoring, treatment, alleviation of, or assistance for, any injury or disability;

(ac) the investigation, replacement or modification or support of the anatomy or of a physiological process;

(ad) supporting or sustaining life;

(ae) disinfection of medical devices;

(af) control of conception; and which does not achieve its primary intended action in or on the human body or animals by any pharmacological or  immunological or metabolic means, but which may be assisted in its intended function by such means;   

(b) an accessory to such an instrument, apparatus, appliance, material or another article; 

(c) in-vitro diagnostic device which is a reagent, reagent product, calibrator, control material, kit, instrument, apparatus, equipment or system, whether used alone or in combination thereof intended to be used for examination and providing information for medical or diagnostic purposes by means of examination of specimens derived from the human bodies or animals.

Pharmaceuticals (Greenfield)
100%
FDI Permitted
100
Main condition:

Greenfield

Other condition:

Nil

Plantation Sector
100%
FDI Permitted
100
Main condition:

(a) Tea sector including tea plantations

(b) Coffee plantations

(c) Rubber plantations

(d) Cardamom plantations

(e) Palm oil tree plantations

(f) Olive oil tree plantations

Note: Besides the above, FDI is not allowed in any other plantation sector/activity

Other condition:

Prior approval of the State Government concerned is required in case of any future land use change.

Ports and Shipping
100%
FDI Permitted
100
Main condition:

FDI is permitted up to 100% on the automatic route, subject to applicable laws/regulations; security and other conditionalities.

Power Exchanges
49%
FDI Permitted
49
Main condition:

Power Exchanges registered under the Central Electricity Regulatory Commission (Power Market) Regulations, 2010.

Other condition:

(i) No non-resident investor/entity, including persons acting in concert, will hold more than 5% of the equity in these companies; and

(ii)The foreign investment would be in compliance with SEBI Regulations; other applicable
laws/regulations; security and other conditionalities.

Print Media (Publication/ printing of scientific and technical magazines/specialty journals/ periodicals and facsimile edition of foreign newspapers)
100%
FDI Permitted
100
Main condition:

1. Publication of facsimile edition of foreign newspapers

2. 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

Other condition:

(a) FDI should be made by the owner of the original foreign newspapers whose facsimile edition is proposed to be brought out in India.

(b) Publication of facsimile edition of foreign newspapers can be undertaken only by an entity incorporated or registered in India under the provisions of the Companies Act, as applicable.

(c) Publication of facsimile edition of a foreign newspaper would also be subject to the Guidelines for publication of newspapers and periodicals dealing with news and current affairs and publication of facsimile edition of foreign newspapers issued by Ministry of Information & Broadcasting on 31.3.2006, as amended from time to time.

Print Media (Publishing of newspaper, periodicals and Indian editions of foreign magazines dealing with news and current affairs)
26%
FDI Permitted
26
Main condition:

1. Publication of Indian editions of foreign magazines dealing with news and current affairs

2. Publishing of newspaper and periodicals dealing with news and current affairs

Other condition:

(a) ‘Magazine’, for the purpose of these guidelines, will be defined as a periodical publication, brought out on non-daily basis, containing public news or comments on public news.

(b) Foreign investment would also be subject to the Guidelines for Publication of Indian editions of foreign magazines dealing with news and current affairs issued by the Ministry of Information & Broadcasting on 4.12.2008.

Private Security Agencies
UPTO 49%
ABOVE 49%
FDI Permitted
74
Main condition:

Private Security Agencies

Other condition:

(1) FDI in Private Security Agencies is subject to compliance with Private Security Agencies (Regulation) (PSAR) Act, 2005, as amended from time to time.

(2) For the purposes of FDI policy on the sector, terms “Private Security Agencies”, “Private Security” and “Armoured Car Service” will have the same meaning as provided under PSAR Act, 2005, which is reproduced as under:

"Private Security Agency" means a person or body of persons other than a government agency, department or organisation engaged in the business of providing private security services including training to private security guards or their supervisor or providing private security guards to any industrial or business undertaking or a company or any other person or property;

"Private Security" means security provided by a person, other than a public servant, to protect or guard any person or property or both and includes provision of armoured car service; "Armoured Car Service" means the service provided by deployment of armed guards along with armoured car and such other related services which may be notified by the Central Government or as the case may be, the State Government from time to time.

Railway Infrastructure
100%
FDI Permitted
100
Main condition:

Construction, operation and maintenance of the following:

(i) Suburban corridor projects through PPP,

(ii) High speed train projects,

(iii) Dedicated freight lines,

(iv) Rolling stock including train sets, and locomotives/coaches manufacturing and maintenance facilities,

(v) Railway Electrification,

(vi) Signaling systems,

(vii) Freight terminals,

(viii) Passenger terminals,

(ix) Infrastructure in industrial park pertaining to railway line/sidings including electrified railway lines and connectivities to main railway line and

(x) Mass Rapid Transport Systems

Other condition:

(i) Foreign Direct Investment in the above mentioned activities open to private sector participation including FDI is subject to sectoral guidelines of Ministry of Railways.

(ii) Proposals involving FDI beyond 49% in sensitive areas from security point of view, will be brought by the Ministry of Railways before the Cabinet Committee on Security (CCS) for consideration on a case to case basis.

Renewable Energy
100%
FDI Permitted
100
Main condition:

100% FDI is permitted under the automatic route. No prior government approval is required.

Roads & Highways
100%
FDI Permitted
100
Main condition:

FDI is permitted up to 100% on the automatic route, subject to applicable laws/regulations; security and other conditionalities.

Satellites- establishment and operation
100%
FDI Permitted
100
Main condition:

Satellites- establishment and operation, subject to the sectoral guidelines of Department of Space/ ISRO

Other condition:

Nil

Single Brand Product Retail Trading
100%
FDI Permitted
100
Main condition:

(1) Foreign Investment in Single Brand product retail trading is aimed at attracting investments in production and marketing, improving the availability of such goods for the consumer, encouraging increased sourcing of goods from India, and enhancing competitiveness of Indian enterprises through access to global designs, technologies and management practices.

(2) FDI in Single Brand product retail trading would be subject to the following conditions:

(a) Products to be sold should be of a ‘Single Brand’ only.

(b) Products should be sold under the same brand internationally i.e. products should be sold under the same brand in one or more countries other than India.

(c) ‘Single Brand’ product-retail trading would cover only products which are branded during manufacturing.

(d) A non-resident entity or entities, whether owner of the brand or otherwise, shall be permitted to undertake ‘single brand’ product retail trading in the country for the specific brand, directly or through a legally tenable agreement with the brand owner for undertaking single brand product retail trading. The onus for ensuring compliance with this condition will rest with the Indian entity carrying out singlebrand product retail trading in India. The investing entity shall provide evidence to this effect at the time of seeking approval, including a copy of the licensing/franchise/sub-licence agreement, specifically indicating compliance with the above condition. The requisite evidence should be filed with the RBI for the automatic route and to competent authority for cases involving approval.

(e) In respect of proposals involving foreign investment beyond 51%, sourcing of 30% of the value of goods purchased, will be done from India, preferably from MSMEs, village and cottage industries, artisans and craftsmen, in all sectors. The quantum of domestic sourcing will be self-certified by the company, to be subsequently checked, by statutory auditors, from the duly certified accounts which the company will be required to maintain. This procurement requirement would have to be met, in the first instance, as an average of five years’ total value of the goods purchased, beginning 1st April of the year of the commencement of the business i.e. opening of the first store. Thereafter, it would have to be met on an annual basis. For the
purpose of ascertaining the 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.

(f) Subject to the conditions mentioned in this Para, a single brand retail trading entity operating through brick and mortar stores, is permitted to undertake retail trading through e-commerce.

(3) Application seeking permission of the Government for FDI exceeding 49% in a company
which proposes to undertake single brand retail trading in India would be made to the
Secretariat for Industrial Assistance (SIA) in the Department of Industrial Policy & Promotion.
The applications would specifically indicate the product/product categories which are proposed
to be sold under a ‘Single Brand’. Any addition to the product/product categories to be sold
under ‘Single Brand’ would require a fresh approval of the Government. In case of FDI up to
49%, the list of products/product categories proposed to be sold except food products would
be provided to the RBI.

Other condition:

(i) Conditions mentioned at Para 5.2.15.3 (2) (b) & 5.2.15.3 (2) (d) will not be applicable for undertaking SBRT of Indian brands.

(ii) Indian brands should be owned and controlled by resident Indian citizens and/or companies which are owned and controlled by resident Indian citizens.

(iii) Sourcing norms will not be applicable up to three years from commencement of the business i.e. opening of the first store 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 Para 5.2.15.3 (2) (e) will be applicable. A Committee under the Chairmanship of Secretary, DIPP, 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 ‘cuttingedge’ technology where local sourcing is not possible and give recommendations for such relaxation.

Telecom Services
UPTO 49%
ABOVE 49%
FDI Permitted
100
Main condition:

All telecom services including Telecom Infrastructure Providers Category-I, viz. Basic, Cellular, United Access Services, Unified License (Access Services), Unified License, National/International Long Distance, Commercial V-Sat, Public Mobile Radio Trunked Services (PMRTS), Global Mobile Personal Communications Services (GMPCS), All types of ISP licenses, Voice Mail/Audiotex/UMS, Resale of IPLC, Mobile Number Portability Services, Infrastructure Provider Category-I (providing dark fibre, right of way, duct space, tower) except Other Service Providers

Other condition:

FDI in Telecom sector is subject to observance of licensing and security conditions by licensee as well as investors as notified by the Department of Telecommunications (DoT) from time to time, except “Other Service Providers”, which are allowed 100% FDI on the automatic route.

Textiles & Garments
100%
FDI Permitted
100
Main condition:

Subject to the provisions of the FDI policy, foreign investment in ‘manufacturing’ sector is
under automatic route. Further, a manufacturer is permitted to sell its products manufactured in
India through wholesale and/or retail, including through e-commerce, without Government
approval.

Thermal Power
100%
FDI Permitted
100
Main condition:

FDI is permitted up to 100% on the automatic route, subject to applicable laws/regulations; security and other conditionalities.

Tourism & Hospitality
100%
FDI Permitted
100
Main condition:

FDI is permitted up to 100% on the automatic route, subject to applicable laws/regulations; security and other conditionalities.

White Label ATM Operation
100%
FDI Permitted
100
Main condition:

White Label ATM Operations

Other condition:

(i) Any non-bank entity intending to set up WLAs should have a minimum net worth of Rs. 100 crore as per the latest financial year’s audited balance sheet, which is to be maintained at all times.

(ii) In case the entity is also engaged in any ‘Other Financial Services’ as laid down at Para 5.2.26 below, then the foreign investment in the company setting up WLA, shall also have to comply with the minimum capitalization norms, if any, for foreign investments in such ‘Other Financial Services’.

(iii) FDI in the WLAO will be subject to the specific criteria and guidelines issued by RBI vide Circular No. DPSS.CO.PD.No. 2298/02.10.002/2011-2012, as amended from time to time.

PROHIBITED SECTORS

  • Lottery Business including Government/private lottery, online lotteries, etc.*

  • Gambling and Betting including casinos*

  • Chit Funds

  • Nidhi Company

  • Trading in Transferable Development Rights (TDR)

  • Real Estate Business or Construction of farm houses**

  • Manufacturing of cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes

  • Sectors not open to private sector investment- atomic energy, railway operations (other than permitted activities mentioned under the Consolidated FDI policy)

PROCEDURES FOR GOVERNMENT APPROVAL

fiilling-application
Filing of Application

Proposal for foreign investment, along with supporting documents to be filed online, on the Foreign Investment Facilitation Portal, at the following url: www.fifp.gov.in/

internal procedure
Internal Procedure for Approvals
  • DIPP will identify the concerned Ministry/ Department and thereafter, circulate the proposal within 2 days. In addition, once the proposal is received, the same would also be circulated online to the RBI within 2 days for comments from FEMA perspective.
  • Proposed investments from Pakistan and Bangladesh would also require clearance from the Ministry of Home Affairs.
  • DIPP would be required to provide its comments within 4 weeks from receipt of an online application, & Ministry of Home Affairs (if applicable) to provide comments within 6 weeks.
  • Pursuant to the above, additional information/ clarifications may be asked from the applicant which is to be provided within 1 week.
  • Proposals involving FDI exceeding INR 50bn (approx. US$ 775m) shall be placed before the Cabinet Committee of Economic Affairs.
app-approved
Final Approval

Once the proposal is complete in all respects, the same gets approved within 8-10 weeks.

FDI reporting requirements

fdi infographics

Documents for Form FC-GPR (Foreign Currency - Gross Provisional Return) SMF

  • CS Certificate
  • Declaration by the Authorised Representative of the Indian Company/LLP
  • Pre and post shareholding pattern in the Indian company
  • Copy of government approval (if applicable)
  • Copy of the order of the High Court on the scheme of merger/ demerger/ amalgamation (if applicable)
  • RBI approval on the amount of refund with respect to the amount of the issue (if applicable)
  • Valuation certificate
  • Approval letter (if non-compliant with the guidelines – if applicable)
  • Relevant RBI approvals for an issue of equity shares against funds payable to the foreign investor
  • FIRC/ Debit statement
  • Know Your Customer (KYC)
  • Board Resolution

 

Note: 

As per the RBI notification on “Foreign Investment in India - Reporting in Single Master Form” of 7th June 2018, now provides for all the extant reporting structures of various types of foreign investments in India are now provided under a Single Master Form (SMF) which is required to be filed online.

As per the RBI Notification ARF and FC-GPR is merged into a single revised FC-GPR (SMF). All new filings for the Form FC-GPR (SMF) have to be done in Single Master Form only.