Union Cabinet has eased foreign direct investment(FDI) norms for various industries such as single-brand retail, coal mining, contract manufacturing and digital media.
The changes in FDI policy will result in making India a more attractive FDI destination which may lead to increased investments,employment and growth.
Single brand Retail sector:Currently,the FDI policy says that a single brand retail company with more than 51% FDI needs to source 30% of its goods from within India.
However,the new decision says that this 30% can be calculated over the first five years of operation.Further,sourcing for exports will also count towards the local sourcing requirement.
Another change is that single-brand retail sector can now start selling online before setting up a brick and mortar store as long as they set up one within two years of starting online sales.Earlier,they had to set up a brick and mortar store before selling online.
Contract manufacturing:Cabinethas been decided to allow 100% FDI under automatic route in contract manufacturing in India as well.
Coal Sector:The cabinet has decided to permit 100% FDI under the automatic route for sale of coal, coal mining activities including associated processing infrastructure and other relevant acts on the subject.
Digital media sector:The cabinet has decided to permit 26% FDI under government route for uploading/streaming of news and current affairs through digital media.