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Govt announces relaxation of FDI norms in 15 sectors


The government opened up 15 sectors  in a bid to push up reforms, allowing 100% FDI in sectors such as completed construction projects, some plantation sectors, cable networks, direct-to-home (DTH) services and some air transport activities.


  • Upto 49% FDI will now be allowed in the defence sector under the automatic route. Currently, FDI up to 49% is allowed in the defence sector but under the government approval route.
  • The government has allowed 100% FDI in completed construction projects. It has also removed restrictions on minimum floor area or minimum capitalisation.
  • In the broadcast sector, FDI limit in news channels has been hiked from 26% to 49%. In the non-news category, now FDI up to 100% has been allowed without the government’s approval.
  • The FDI limit in DTH (direct-to-home) and cable networks has been increased to 100%. Earlier, the limit was 74% in DTH services.
  • The government has opened plantation activities in coffee, rubber, cardamom, palm oil tree and olive oil tree to 100% FDI. Right now, only tea plantations are open to foreign investment.
  • Single-brand retail firms also have been allowed to sell products through e-commerce, subject to government approval.
  • Manufacturers have been permitted to sell their products through wholesale/retail – including through e-commerce. Also, a single entity has also been allowed to carry out business in wholesale/cash & carry and single-brand retail.
  • For private banks, the government has removed the distinction between different categories of foreign investment. Accordingly, foreign institutional investors, foreign portfolio investors and qualified foreign investors can now invest up to 74% in the sector.
  • Regional air transport service (RSOP) will now be eligible for foreign investment up to 49% under automatic route. The FDI cap in non-scheduled air transport service and ground handling services has been increased to 100% from 74%.
  • The Foreign Investment Promotion Board (FIPB) can now clear proposals up to Rs 5,000 crore from the earlier limit of Rs 3,000 crore under single-window clearance.

Fifteen areas and 32 investment points will benefit from the liberalisation.

The crux of these reforms is to further ease, rationalize and simplify the process of foreign investments in the country and to put more and more FDI proposals on automatic route instead of government route where time and energy of the investors is wasted.

sources: pib, ndtv, the hindu.

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