Amendments in FDI Policy, 2018

The Government of India has made several amendments to the Foreign Direct Investment (FDI) Policy in 2018 to further liberalize and simplify the FDI regime in the country. These amendments aim to attract more foreign investment, boost economic growth, and create jobs.

Key Amendments:

1. Single-Brand Retail:

• 100% FDI under Automatic Route: Previously, single-brand retail trading was allowed up to 51% FDI under the automatic route. The new policy allows 100% FDI under the automatic route, subject to certain conditions.
• Relaxation in Sourcing Norms: The mandatory sourcing requirement of 30% of goods from India has been relaxed. Now, single-brand retailers can source up to 50% of goods from India.

2. Multi-Brand Retail:

• 51% FDI under Government Approval Route: Multi-brand retail trading continues to be prohibited under the automatic route. However, the FDI limit has been increased from 51% to 51% under the government approval route.
• Relaxation in Sourcing Norms: The mandatory sourcing requirement of 30% of goods from India has been relaxed. Now, multi-brand retailers can source up to 50% of goods from India.

3. Defense Sector:

• 74% FDI under Automatic Route: FDI in the defense sector has been liberalized. Now, up to 74% FDI is allowed under the automatic route, subject to certain conditions.
• Relaxation in Licensing Requirements: The requirement of an industrial license for defense manufacturing has been removed.

4. Civil Aviation Sector:

• 100% FDI under Automatic Route: FDI in scheduled air transport services, including domestic airlines, has been allowed up to 100% under the automatic route.
• Relaxation in Ownership and Control Norms: The requirement of substantial ownership and effective control by Indian nationals has been relaxed. Now, foreign airlines can have up to 49% stake in Indian airlines.

5. Broadcasting Sector:

• 100% FDI under Government Approval Route: FDI in the broadcasting sector has been allowed up to 100% under the government approval route.
• Relaxation in Ownership and Control Norms: The requirement of Indian ownership and control has been relaxed. Now, foreign companies can have up to 49% stake in Indian broadcasting companies.

6. E-Commerce Sector:

• 100% FDI under Government Approval Route: FDI in e-commerce has been allowed up to 100% under the government approval route.
• Relaxation in Ownership and Control Norms: The requirement of Indian ownership and control has been relaxed. Now, foreign companies can have up to 49% stake in Indian e-commerce companies.

7. Real Estate Sector:

• 100% FDI under Automatic Route: FDI in real estate development has been allowed up to 100% under the automatic route, subject to certain conditions.
• Relaxation in Minimum Capitalization Requirement: The minimum capitalization requirement for foreign investors has been reduced from \$10 million to \$5 million.

8. Construction Development Sector:

• 100% FDI under Automatic Route: FDI in construction development projects has been allowed up to 100% under the automatic route, subject to certain conditions.
• Relaxation in Minimum Capitalization Requirement: The minimum capitalization requirement for foreign investors has been reduced from \$10 million to \$5 million.

9. Single-Brand Product Retail:

• 100% FDI under Automatic Route: FDI in single-brand product retail has been allowed up to 100% under the automatic route, subject to certain conditions.
• Relaxation in Sourcing Norms: The mandatory sourcing requirement of 30% of goods from India has been relaxed. Now, single-brand product retailers can source up to 50% of goods from India.

10. Other Sectors:

• 100% FDI under Automatic Route: FDI in several other sectors, such as food processing, renewable energy, and healthcare, has been allowed up to 100% under the automatic route.

These amendments to the FDI Policy are expected to boost foreign investment in India, create jobs, and contribute to the overall economic growth of the country.