- Published: Wednesday, 10 January 2018 15:42
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In case of single brand retail, the current policy allows 49 per cent FDI under the automatic route and up to 100 per cent through the government approval route. “It has been decided to permit single brand retail trading entity to set off its incremental sourcing of goods from India for global operations during initial 5 years, beginning 1st April of the year of the opening of first store against the mandatory sourcing requirement of 30 per cent of purchases from India,” a government statement said.
For this purpose, incremental sourcing will mean the increase in terms of value of such global sourcing from India for that single brand (in INR terms) in a particular financial year over the preceding financial year by the non-resident entities undertaking single brand retail trading entity, either directly or through their group companies. After completion of this 5-year period, the single brand retail entity shall be required to meet the 30 per cent sourcing norms directly towards its India’s operation on an annual basis. The mandatory sourcing requirement of 30 per cent of purchases from India had been a contentious clause in the current policy for a number of foreign players.
In the civil aviation sector, under the current policy, foreign airlines are allowed to invest under government-approval route in the capital of Indian companies operating scheduled and non-scheduled air transport services up to 49 per cent of their paid-up capital. However, this provision was presently not applicable to Air India. This has now been done away with, subject to the conditions that the foreign investment shall not exceed 49 per cent either directly or indirectly. “Substantial ownership and effective control of Air India shall continue to be vested in Indian National,” it said.
The government notification also clarified that real estate broking services did not amount to real estate business and was therefore eligible for 100 per cent FDI under automatic route. In case of power exchanges, the extant policy provides for 49 per cent FDI under automatic route for exchanges registered under the Central Electricity Regulatory Commission (Power Market) Regulations, 2010. However, FII/FPI purchases were restricted to secondary market only. This has now been changed and this provision has been done away with, thereby allowing FIIs/FPIs to invest in power exchanges through primary market as well.
(Source: The Indian Express)