Foreign Investments to be introduced in many sectors: Industries rejoice
Seeking to streamline the foreign investment regime, the commerce and industry ministry has proposed to introduce a composite cap which will include FDI (Foreign Direct Investment), FII (Foreign Institutional Investment) and other instruments in various sectors.
In a draft cabinet note, which was circulated for inter-ministerial consultations, the DIPP (Department of Industrial Policy and Promotion) has said that under the present structure, a change in the FII/FPI investments can lead to change in control and ownership of a company. Hence many companies might not be keen to take that route.
The proposal seeks to do away with the different kinds of overseas investment and bring about clarity in the norms. The sectors including agriculture, tea, mining, broadcasting, media, airports, retail (single brand and multi-brand), e-commerce, asset reconstruction companies, banking, commodity exchanges and insurance is expected to be benefited by easing the norms of FDI.
The move would help in removing ambiguity on application of sectoral caps, conditionality and approval requirements in different sectors and bring simplification in the foreign investment policy.
It would also provide Indian firms and investors an option of category of investments between FDI, FPI (FII, Qualified Foreign Investors), NRI and FVCI (Foreign Venture Capital Investor).
As per the proposal, the DIPP has proposed a composite foreign investment cap (FDI + FPI (FII, QFI) + NRI + FVCI) in the sectors mentioned above.
Abbreviations used-
FDI- Foreign Direct Investment
FPI- Foreign Portfolio Investment
FII- Foreign Institutional Investment
QFI- Qualified Foreign Investors
NRI- Non-resident Indian
FVCI- Foreign Venture Capital Investments
Source- The Financial Express
Agriculture, Airports, asset reconstruction companies, banking, broadcasting, Department of Industrial Policy and Promotion, E-commerce, foreign direct investment, Foreign Institutional Investment, Foreign Investments, foreign investments in real estate, less foreign investments, Media, Mining
