| Sl.No. |
Sector
|
Guidelines |
| 1. |
Banking
Non BankingFinancial Companies (NBFC) |
NRI
holding may be upto 40%, inclusive of
equity participation by other foreign
investors. Foreign investment of upto
20% is permitted by foreign banking companies
or finance companies including multilateral
financial institutions. Multilateral institutions
are allowed to invest within the overall
foreign direct investment cap of 40% in
case of shortfall in foreign direct investment
contribution by NRIs.
The automatic route is not available.
a.FDI/NRI/OCB
investments allowed in the following 18
NBFC activities shall be as per levels
indicated below:
i. Merchant banking
ii. Underwriting
iii. Portfolio Management Services
iv. Investment Advisory Services
v. Financial Consultancy
vi. Stock Broking
vii. Asset Management
viii.Venture Capital
ix. Custodial Services
x. Factoring
xi. Credit Reference Agencies
xii.Credit rating Agencies
xiii.Leasing & Finance
xiv.Housing Finance
xv.Forex Broking
xvi.Credit card business
xvii.Money changing Busine
xviii.Micro Credit
xix.Rural Credit
b.Minimum Capitalisation
Norms for fund based NBFCs:
For FDI UPTO 51% - US$ 0.5 million to
be brought upfront
For FDI above 51% and upto 75% - US $
5 million to be brought upfront
For FDI above 75% and upto 100% - US $
50 million out of which US $ 7.5 million
to be brought upfront and the balance
in 24 months
100% NBFC Holding Company with a minimum
capital of US $ 50 million allowed to
set up a 100% downstream subsidiary to
undertake specific NBFC activities. Such
a subsidiary, however, could be required
to dis-invest its equity to the minimum
extent of 25%, through a public offering
only, within a period of three years.
c. Minimum
capitalisation norms for non-fund based
activities:
Minimum capitalisation norm of US $ 0.5
million is applicable in respect of all
permitted non-fund based NBFCs with foreign
investment.The automatic route is not
available.
|
| 2.
|
Civil
Aviation (detailed guidelines have been
issued by Ministry of Civil Aviation) |
In
the domestic Airlines sector:
i.FDI upto 40% permitted subject to no
direct or indirect equity participation
by foreign airlines is allowed.
ii. 100% investment by NRIs/OCBs. iii.
The automatic route is not available.
|
| 3. |
Telecommunication |
i.In
basic, Cellular Mobile, paging and Value
Added service, and Global Mobile Personal
Communications by Satellite, FDI is limited
to 49% subject to grant of licence from
Department of Telecommunications and adherence
by the companies (who are investing and
the companies in which investment is being
made) to the licence conditions for foreign
equity cap and lock in period for transfer
and addition of equity and other licence
provisions.
ii. No equity cap is applicable to manufacturing
activities.
iii. FDI upto 100% is allowed for the following
activities in the telecom sector :
a. ISPs not providing gateways (both for
satellite and submarine cables);
b. Infrastructure Providers providing dark
fibre (IP Category 1);
c. Electronic Mail; and
d. Voice Mail The above would be subject
to the following conditions:
e. FDI upto 100% is allowed subject to the
condition that such companies would divest
26% of their equity in favour of Indian
public in 5 years, if these companies are
listed in other parts of the world.
f. The above services would be subject to
licensing and security requirements, wherever
required.
g. Proposals for FDI beyond 49% shall be
considered by FIPB on case to case basis.
|
| 4. |
Petroleum(other than Refining)
Petroleum (Refining) |
a. Under the exploration policy, FDI utpo
100% is allowed for small fields through
competitive bidding; upto 60% for unincorporated
JV; and upto 51% for incorporated JV with
a No Objection Certificate for medium
size fields.
b. For petroleum products and pipeline
sector, FDI is permitted upto 51%.
c. FDI is permitted upto 74% in infrastructure
related to marketing and marketing of
petroleum products.
d. 100% wholly owned subsidiary(WOS) is
permitted for the purpose of market study
and formulation.
e. 100% wholly owned subsidiary is permitted
for investment/Financing.
f. For actual trading and marketing, minimum
26% Indian equity is required over 5 years.
The automatic
route is not available.
a. FDI is permitted upto 26% in case of
public sector units(PSUs). PSUs will hold
26% and balance 48% by public.Automatic
route is not available.
b. In case of private Indian companies,
FDI is permitted upto 100% under automatic
route.
|
| 5.
|
Housing
& Real Estate |
No foreign investment
is permitted in this sector. NRIs/OCBs
are allowed to invest. The scheme specific
to NRIs and OCBs covers the following:
a. Development of serviced plots and construction
of built up residential premises
b. Investment in real state covering construction
of residential and commercial premises
including business centres and offices
c. Development of townships
d. City and regional level urban infrastructure
facilities, including both roads and bridges
e. Investment in manufacture of building
materials
f. Investment in participatory ventures
in (a) to (e) above g. Investment in housing
finance institutions
|
| 6.
|
Coal
and Lignite |
i. Private Indian companies
setting up or operating power projects
as well as coal or lignite mines for captive
consumption are allowed FDI upto 100%.
ii. 100% FDI is allowed for setting up
coal processing plants subject to the
condition that the company shall not do
coal mining and shall not sell washed
coal or sized coal from its coal processing
plants in the open market and shall supply
the washed or sized coal to those parties
who are supplying raw coal to coal processing
plants for washing or sizing.
iii. FDI upto 74% is allowed for exploration
or mining of coal or lignite for captive
consumption.
iv. In all the above cases, FDI is allowed
upto 50% under the automatic route subject
to the condition that such investment
shall not exceed 49% of the equity of
a PSU.
|
| 7.
|
Venture
Capital Fund(VCF) and Venture Capital Company(VCC)
|
An
offshore venture capital company may contrinute
upto 100% of the capital of a domestic
venture capital fund and may also set
up a domestic asset management company
to manage the fund.VCFs and VCCs are permitted
upto 40% of the paid up corpus of the
domestic unlisted companies. This ceiling
would be subject to relevant equity investment
limit in force in relation to areas reserved
for SSI. Investment in a single company
by a VCF/VCC shall not exceed 5% of the
paid-up corpus of a domestic VCF/VCC.
The automatic
route is not available.
(a) Offshore Venture Capital Funds/Companies
are allowed to invest in domestic venture
capital undertakings as well as other
companies through the automatic route,
subject only to SEBI regulations and sector
specific caps on FDI.
|
| 8.
|
Trading
|
Trading is permitted
under automatic route with FDI upto 51%
provided it is primarily export activities,
and the undertaking is an export house/trading
house/super trading house/star trading
house. However, under the FIPB route:-
i.100% FDI is permitted in case of trading
companies for the following activities:
 Exports;
Bulk
imports with export/ex-bonded warehouse
sales;
Cash
and carry wholesale trading;
Other
import of goods or services provided at
least 75% is for procurement and sale of
goods and services among the companies of
the same group and not for third party use
or onward transfer/distribution/sales.
ii. The following kinds of trading are also
permitted, subject to provisions of EXIM
Policy:
a. Companies for providing after sales services
(that is no trading per se)
b.Domestic trading of
products of JVs is permitted at the wholesale
level for such trading companies who wish
to market manufactured products on behalf
of their joint ventures in which they
have equity participation in India.
c. Trading of hi-tech items/items requiring
specialised after sales service
d. Trading of items for social sector
e. Trading of hi-tech, medical and diagnostic
items.
f. Trading of items sourced from the small
scale sector under which, based on technology
provided and laid down quality specifications,
a company can market that item under its
brand name.
g. Domestic sourcing of products for exports.
h. Test marketing of such items for which
a company has approval for manufacture
provided such test marketing facility
will be for a period of two years, and
investment in setting up manufacturing
facilities commences simultaneously with
test marketing.
i. FDI upto 100% permitted for e-commerce
activities subject to the condition that
such companies would divest 26% of their
equity in favour of the Indian public
in five years, if these companies are
listed in other parts of the world. Such
companies would engage only in business
to business (B2B) e-commerce and not in
retaiol trading.
|
| 9.
|
Investing
companies in infrastructure/ service sector |
In respect of the companies
in infrastructure/service sector, where
there is a prescribed cap for foreign
investment, only the direct investment
will be considered for the prescribed
cap and foreign investment in an investing
company will not be set off against this
cap provided the foreign direct investment
in such investing company does not exceed
49% and the management of the investing
company is with the Indian owners. The
automatic route is not available.
|
| 10.
|
Atomic
energy |
The following three activities are permitted
to receive FDI/NRI/OCB investments through
FIPB (as per detailed guidelines issued
by Department of Atomic Energy vide Resolution
No.8/1(1)/97-PSU/1422 dated 6.10.98):
a. Mining and mineral separation
b. Value addition per se to the products
of (a) above
c. Integrated activities (comprising of
both (a) and (b) above.
The following
FDI participation is permitted:
i. Upto 74% in both pure value addition
and integrated projects.
ii. For pure value addition projects as
well as integrated projects with value
addition upto any intermediate stage,
FDI is permitted upto 74% through joint
venture companies with Central/State PSUs
in which equity holding of at least one
PSU is not less than 26%.
iii. In exceptional cases, FDI beyond
74% will be permitted subject to clearance
of the Atomic Energy Commission before
FIPB approval.
|
| 11. |
Defence and strategic industries |
No
FDI/NRI/OCB investment is permitted
|
| 12. |
Agriculture (including plantation) |
No
FDI/NRI/OCB investment is permitted
|
| 13.
|
Print
media |
No
FDI/NRI/OCB investment is permitted
|
| 14. |
Broadcasting |
No
FDI/NRI/OCB investment is permitted
|
| 15. |
Power |
Upto
100% FDI allowed
|
| 16.
|
Drugs
& Pharmaceuticals |
i. FDI upto 74% in the
case of bulk drugs, their intermediates
and formulations (except those produced
by the use of recombinant DNA technology)
would be covered under automatic route.
ii. FDI above 74% for manufacture of bulk
drugs will be considered by the Government
on case to case basis for manufacture
of bulk drugs from basic stages and their
intermediates and bulk drugs produced
by the use of recombinant DNA technology
as well as the specific cell/tissue targeted
formulations provided it involves manufacturing
from basic stage.
|
| 17. |
Roads & Highways, Ports and Harbours. |
FDI upto 100% under
automatic route is permitted in projects
for construction and maintenance of roads,
highways, vehicular bridges, toll roads,
vehicular tunnels, ports and harbours.
|
| 18. |
Hotels & Tourism |
100% FDI is permissible
in the sector.The term hotels include
restaurants, beach resorts, and other
tourist complexes providing accommodation
and/or catering and food facilities to
tourists. Tourism related industry includes
travel agencies, tour operating agencies
and tourist transport operating agencies,
units providing facilities for cultural,
adventure and wild life experience to
tourists, surface, air and water transport
facilities to tourists, leisure, entertainment,
amusement, sports, and health units for
tourists and Convention/Seminar units
and organisations.
Automatic route is available upto 51%
subject to the following parameters.
For foreign technology agreements, automatic
approval is granted if
i. upto 3% of the capital cost of the
project is proposed to be paid for technical
and consultancy services including fees
for architects, design, supervision, etc.
ii. upto 3% of net turnover is payable
for franchising and marketing/publicity
support fee, and
iii. upto 10% of gross operating profit
is payable for management fee, including
incentive fee.
|
| 19. |
Mining. |
i. For exploration and
mining of diamonds and precious stones
FDI is allowed upto 74% under automatic
route.
ii. For exploration and mining of gold
and silver and minerals other than diamonds
and precious stones, metallurgy and processing
FDI is allowed upto 100% under automatic
route.
iii. Press Note No. 18 (1998 series) dated
14.12.98 would not be applicable for setting
up 100% owned subsidiaries in so far as
the mining sector is concerned, subject
to a declaration from the applicant that
he has no existing joint venture for the
same area and / or the particular mineral.
|
| 20. |
Postal |
services Couriers carrying
packages, parcels and other items which
do not come within the ambit of Indian
Post Office Act 1998 shall not be permitted.
|
| 21.
|
Pollution
Control and management |
FDI upto 100% in both
manufacture of pollution control equipment
and consultancy for integration of pollution
control systems is permitted under automatic
route.
|
| 22.
|
Advertising
and films |
Automatic
approval is available for the following:
- Upto 74% FDI in advertising sector
- Upto 100% FDI in film industry (i.e.
film financing, production, distribution,
exhibition, marketing and associated
activities relating to film industry)
subject to the following:
i. Companies with an
established track record in films, TV,
music, finance and insurance would be
permitted.
ii. The company should have a minimum
paid up capital of US $ 10 million if
it is the single largest equity shareholder
and at least US $ 5 million in other cases.
iii. Minimum level of foreign equity investment
would be US $ 2.5 million for the single
largest equity shareholder and US $ 1
million in other cases.
iv. Debt equity ratio of not more than
1:1, i.e., domestic borrowings shall not
exceed equity.
|