Govt amends FDI rules towards Ease of doing business

100 percent FDI introduced in contract manufacturing under automatic route and 26 per cent FDI has been allowed in digital media

Published on:

28 Aug 2019, 9:30 am

New Delhi: In order to boost domestic manufacturing and simplify the FDI policy to provide ease of doing business the government on Wednesday allowed 100 per cent FDI in contract manufacturing under the automatic route. The Union Cabinet headed by Prime Minister Narendra Modi has also relaxed FDI rule for foreign single-brand retailers.

Following are the main highlights of the changes in FDI policy:

In the coal sector, for sale of coal, 100% FDI under automatic route for coal mining, activities including associated processing infrastructure will attract international players to create an efficient and competitive coal market.
Manufacturing through contract contributes equally to the objective of Make in India. FDI now being permitted under automatic route in contract manufacturing will be a big boost to the manufacturing sector in India.
The existing FDI Policy provides that 30% of the value of goods has to be procured from India if SBRT entity has FDI more than 51%. Further, as regards local sourcing requirement, the same can be met as an average during the first 5 years, and thereafter annually towards its India operations. With a view to provide greater flexibility and ease of operations to SBRT entities, it has been decided that all procurements made from India by the SBRT entity for that single brand shall be counted towards local sourcing, irrespective of whether the goods procured are sold in India or exported. Further, the current cap of considering exports for 5 years only is proposed to be removed, to give an impetus to exports.
Under the new FDI policy, 26% FDI is permitted under government route for uploading/ streaming of News & Current Affairs through Digital Media, on the lines of print media.

Later in a press conference Union commerce and industries minister, Piyush Goyal said "The new amendments to the FDI Policy are meant to liberalize and simplify the FDI policy to provide ease of doing business in the country, leading to larger FDI inflows and thereby contributing to the growth of investment, income and employment".