New Delhi: The Modi government on Wednesday effected major changes in the FDI policy with the avowed aim of making India a more attractive FDI destination and manufacturing hub, leading to increased investment, employment and growth.
The Union Cabinet has accordingly allowed 100% FDI (foreign direct investment) under automatic route in contract manufacturing, coal mining and associated infrastructure.
The move will attract international players and lead to the creation of an efficient and competitive coal market. Further, manufacturing through contract will get a big boost and serve the objective of Make in India.
Announcing the decisions, Commerce and Industry Minister Piyush Goyal told a Press conference that FDI rules have been also relaxed for single brand retail.
To begin with, the local sourcing norms have been eased by expanding the definition of 30% sourcing. Besides, exports will also be included in the 30 per cent that the foreign investor will have to source locally.
Easing the local sourcing norms will give greater flexibility and facilitate ease of operations in the single brand business, besides creating a level playing field for companies with higher exports.
Another key decision is that companies can now start online retailing before establishing a physical store. This aligns well with the 'Digital India' initiative and gives them time to build their brick-and-mortar presence.
The Cabinet has also approved 26% FDI in digital media. The extant FDI policy provides for 49% FDI under approval route in Up-linking of 'News &Current Affairs' TV Channels.
It has been decided to permit 26% FDI under government route for uploading/ streaming of News & Current Affairs through Digital Media, on the lines of print media.
As Commerce and Industry Minister Piyush Goyal stressed, the changes in the FDI policy are aimed at liberalising and simplifying the FDI policy to provide ease of doing business in the country, leading to larger FDI inflows and thereby contributing to growth of investment, income and employment.