Foreign Direct Investment Part 1

AirportsBroadcasting for grant of permission for setting
Government approval is required for FDI beyondup of FM Radio Stations. No private operator is
74% requiring in the Airports sector and up toallowed in terrestrial TV transmission.Coal &
100% FDI is allowed. Domestic Airlines In theLigniteOperating power projects as well as coal or
domestic Airlines allows FDI up to 49% permittedlignite mines could be set by Private Indian
under automatic route. 100% investment by NRIsCompanies or pure value addition and integrated
permitted under automatic route subject to noprojects could amount up to 74% in both the
direct or indirect equity participation by foreignfields. The company shall not do coal mining and
airlines. The detailed guidelines could be found withshall not sell washed coal or sized coal from its
the Ministry of Civil Aviation.Atomic Mineralscoal processing plants in the open market and shall
The following three activities are permitted tosupply the washed or sized coal to those parties
receive FDI/NRI investments:Mining and mineralwho are supplying raw coal to coal processing
separation along with the value addition per sectorplants for washing or sizing and therefore 100%
to the products of integrated activities includingFDI is allowed for setting up coal processing
mining and mineral separation as mentionedplants.The coal processing plants allows 100% FDI
above.The following FDI participation isbut subjected to conditions and up to 50% under
permitted:Up to 74% in pure value addition andthe automatic route subject to the condition
integrated projects as well as projects with valueallows FDI in all the above mentioned cases shall
addition up to any intermediate is permittednot exceed 49% of the equity of a PSU.Defense
through joint venture companies with Central/& Strategic IndustriesForeign Direct Investment,
State PS4.s in which equity holding of at least oneincluding NRI investment, is permitted up to 26%
PSU is not less than 26%. In exceptional cases,with prior Government approval subject to
FDI beyond 74% will be permitted subject tolicensing and security requirementsEstablishment
clearance of the Atomic Energy Commissionand operation of SatelliteFDI up to 74% is
before FIPB approval.Agriculture (Includingpermitted with prior Government approvalHousing
Plantation)& Real EstateInterestingly NRIs are allowed to
No FDI/NRI investments permitted other thaninvest in the following activities:
Tea sector, where FOI permitted up to 100% inThe development of serviced plots and
Tea sector, including tea plantations, with priorconstruction of built up residential premises. The
Government approval and subject to followingInvestment in real estate covers construction of
conditions:Compulsory divestment of 26% equityresidential and commercial premises including
in favor of Indian partner/Indian public within abusiness centers and offices. Both roads and
period of five years, and an approval required inbridges include with the development of
case of any future land use change from thetownships, city and regional level urban
Prior State government.The above dispensationinfrastructure facilities. FDI is also open to
would be applicable to all fresh investments (FDI)investment in manufacture of building materials
made in this sector.Broadcasting and TValong with investment in participatory ventures
Software Production allows upto100% foreignmentioned in (a) to (e) above. Housing finance
investment but is subjected to following clausesinstitutions and related investment is also open to
mentioned below:The future laws on broadcastingFDI as an NBFCInvesting Companies in
and no claim of any privilege or protection byInfrastructure/Service SectorIn respect of the
virtue of approval accorded, and; not undertakingcompanies in infrastructure/service sector, where
any broadcasting from Indian soil withoutthere is a prescribed cap for foreign investment,
Government approval.Setting up hardwareonly the direct investment will be considered for
facilities, such as unlinking, HUB, etc. Privatethe prescribed cap and foreign investment in an
companies incorporated in India with permissibleinvesting company will not be set off against this
FII/NRI/PIO equity within the limits (as in the casecap provided the foreign direct investment in such
of telecom sector FDI limit up to 49% inclusive ofinvesting company does not exceed 49% and the
both FOI and portfolio investment) to set upmanagement of the investing company is with
unlinking hub (teleports) for leasing or hiring outthe Indian owners. The automatic route is not
their facilities to broadcasters. All TV channelsavailableInsuranceFDI up to 26% in the Insurance
irrespective of management control to uplinksector is allowed on the automatic route subject
from India in regards to satellite broadcasting isto obtaining license from Insurance Regulatory &
available provided that they undertake to complyDevelopment Authority (IRDA)Lottery Business,
with the broadcast (program & advertising)Gambling & BettingGovernment has reiterated
code.Under the Cable Television Network Rulesprohibition of Foreign Direct Investment (FDI) /
(1994) to provide cable TV services, foreignForeign Technical Collaboration (FTC) in any form
investment is allowed up to 49% (inclusive ofin lottery business, gambling and betting sector.
both FDI and portfolio investment) of paid upForeign Technology Collaboration including
share capital. 51% of paid up share capital mustFranchise/Trading/brand name, management
be held by Indian citizens within a company andcontract etc. Gambling and betting sector is also
are eligibleThe company with a maximum ofprohibited in the lottery business.MiningThe mining
foreign equity including FDI/NRI/FII of 49% wouldof diamonds and precious stones FDI is allowed up
be eligible to obtain Direct-to-Home License. Theto 74% under automatic route. For exploration
FDI component cannot exceed 20% within theand mining of gold and silver and minerals other
foreign equity. The Terrestrial Broadcasting FMthan diamonds and precious stones, metallurgy
licensee will be a company registered in Indiaand processing, allows up to 100% under
under the Companies Act. NRI & PIO investmentsautomatic route. Setting up 100% owned
and portfolio investments has been permittedsubsidiaries in the mining sector is concerned and
including FDI or Foreign investment up to 20%subjected to a declaration from the applicant that
equity for FM Radio's Broadcasting serviceshe has no existing joint venture for the same
subject to such terms and conditions as specifiedarea and / or the particular mineral.
from time to time by Ministry of Information and