Pursuant to the Indian Government’s ‘Make in India’ campaign; with a view to improving the ease of doing business in India and attracting foreign direct investment (‘FDI’) in the country, the Department of Industrial Policy and Promotion of the Ministry of Commerce & Industry (‘DIPP’) has, on November 24, 2015, vide Press Note 12 (2015 series) (‘Press Note’) introduced various changes to the Consolidated Foreign Direct Investment Policy effective May 12, 2015 as amended (‘FDI Policy’).
The reforms introduced by this Press Note broadly relate to:
- Increase in Sectoral Caps. FDI caps for several sectors, including defence, broadcasting, non-scheduled air transport services, ground handling services, credit information companies, have been increased.
- Relaxation of Conditionalities. The conditions attached to FDI in certain sectors, particularly in construction, LLPs, and in investments by NRIs have been relaxed.
- New Sectors. Foreign investment in sectors like duty free shops, plantations activities (other than tea plantations), and regional air transport services, is now permitted.
This ELP newsletter provides an analysis of the changes introduced by the Press Note.