Sector wise Guide line for FDI


The foreigners may invest as per sector /activity and policies framed by the government in these areas. The foreigners/  non residents may invest 100% in most of the sectors and some of investment restricted below then 100% with different capital locks and with other permissions and prior approvals. The investment can be made through two routs one is Automatic Rout and other is Government Rout which is depend on sectors. In Automatic Rout the investor does not require any prior permission/approval and the investor can make investment freely in covered sectors under automatic rout and whereas the sectors covered under Government rout require prior permission/approvals from Government i.e. FIPB (Foreign Investment Promotion Board), RBI (Reserve Bank of India), and several other authorities which are depend on sectors in which the investor intend to invest.

 

 

Sector wise rules.

 

 

S. No.

Sector/Activity

% of FDI
Cap/Equity

Entry Rout

AGRICULTURE

5.2.1

Agriculture & Animal Husbandry

 

 

 

 

a) Floriculture, Horticulture, and Cultivation of Vegetables & Mushrooms under controlled conditions;


b) Development and production of Seeds and planting material;


c) Animal Husbandry (including of breeding of dogs), Pisciculture, Aquaculture under controlled conditions; and


d) services related to agro and allied sectors

 

100%

Automatic

5.2.2

Tea Plantation

 

 

5.2.2.1

 

Tea sector including tea plantations

 

100%

Government

         INDUSTRY

 

MINING

 

 

5.2.3

MINING

 

 

5.2.3.1

 

Mining and Exploration of metal and non-metal ores including diamond, gold, silver and precious ores but excluding titanium bearing minerals and its ores; subject to the Mines and Minerals( Development & Regulation) Act, 1957.

 

100%

Automatic

5.2.3.2

Coal and Lignite

 

 

 

 

(1) Coal & Lignite mining for captive consumption by power projects, iron & steel and cement units and other eligible activities permitted under and subject to the provisions of Coal Mines (Nationalization) Act, 1973

 

100%

Automatic

 

 

(2) Setting up coal processing plants like washeries 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.

 

100%

Automatic

 

5.2.3.3

 

Mining and mineral separation of titanium bearing minerals and ores, its value addition and integrated activities

 

 

 

 

5.2.3.3.1

 

Mining and mineral separation of titanium bearing minerals & ores, its value addition and integrated activities subject to sectoral regulations and the Mines and Minerals (Development and Regulation Act 1957)

 

100%

Government

 

MANUFACTURING

 

 

 

 

5.2.4

 

FDI in MSEs will be subject to the sectoral caps, entry routes and other relevant sectoral regulations.

5.2.5

DEFENCE

 

 

 

5.2.5.1

 

Defence Industry subject to Industrial license under the Industries (Development & Regulation) Act 1951

 

26%

Government

 

POWER

 

 

 

5.2.6

Electric Generation, Transmission, Distribution and Trading

 

 

 

5.2.6.1

 

i) Generation and transmission of electric energy produced in-hydro electric, coal/lignite based thermal, oil based thermal and gas based thermal power plants.
ii) Non-Conventional Energy Generation and Distribution.
iii) Distribution of electric energy to households, industrial, commercial and other users and
iv) Power Trading

 

100%

Automatic

           SERVICES SECTOR

 

5.2.7

Civil Aviation Sector

 

 

 

5.2.7.2.1

Airports

 

 

 

 

(a) Greenfield projects

100%

Automatic

 

(b) Existing projects

100%

Automatic up to 74%
Government
Route beyond
74%

5.2.7.2.2

Air Transport Services

 

 

 

 

(1) Scheduled Air Transport Service/ Domestic Scheduled Passenger Airl

ine

49% FDI
(100% for NRIs)

Automatic

 

(2) Non-Scheduled Air Transport Service

74% FDI
(100% for NRIs)

Automatic up to 49%
Government
Route beyond 49% and up to 74%

 

(3) Helicopter services/seaplane
services requiring DGCA approval

100%

Automatic

5.2.7.2.3

Other services under Civil Aviation sector

 

 

 

(1) Ground Handling Services subject to sectoral regulations and security clearance

74% FDI
(100% for NRIs)

Automatic up to 49%
Government
route beyond
49% and up to 74%

 

(2) Maintenance and Repair organizations; flying training
institutes; and technical training institutions

100%

Automatic

5.2.8

Asset Reconstruction Companies

49% of paid-up
capital of ARC

Government

5.2.9

Banking –Private sector

 

 

5.2.9.1

Banking –Private sector

74% including
investment by FIIs

Automatic up to 49%
Government
route beyond
49% and up to 74%

5.2.10

Banking- Public Sector

 

 

5.2.10.1

Banking- Public Sector subject to Banking Companies (Acquisition & Transfer of Undertakings) Acts 1970/80. This ceiling (20%) is also and its associate Banks.

20% (FDI and
Portfolio
Investment)

Government

5.2.11

Broadcasting

 

 

5.2.11.1

Terrestrial Broadcasting FM (FM Radio) subject to such terms and conditions as specified from time to time by Ministry of Information and Broadcasting for grant of permission for setting up of FM Radio Stations

20% (FDI, NRI & PIO investments and
portfolio investment)

Government

5.2.11.2

Cable Network subject to Cable Television Network Rules, 1994 and other conditions as specified from time to time by Ministry of Information and Broadcasting

49% (FDI, NRI & PIO investments and
portfolio investment)

Government

5.2.11.3

Direct –to-Home subject to such guidelines/terms and conditions as specified from time to time by
Ministry of Information and Broadcasting

49% (FDI, NRI & PIO investments and
portfolio
investment)
Within this limit, FDI component not
to exceed 20%

Government

5.2.11.4

Headend-In-The-Sky (HITS) Broadcasting Service refers to the
multichannel downlinking and distribution of television programme in CBand or Ku Band wherein all the pay channels are downlinked at a central facility (Hub/teleport) and again uplinked to a satellite after encryption of channel. At the cable headend these encrypted pay channels are downlinked using a single satellite antenna, Tran modulated and sent to the subscribers by using a land based transmission system comprising of infrastructure of cable/optical fibres network.

5.2.11.4.1

5.2.11.4.1 FDI limit in (HITS) Broadcasting
Service is subject to such guidelines/terms and conditions as specified from time to time by
Ministry of Information and Broadcasting.

74% (total direct and indirect foreign investment including portfolio and FDI)

Automatic up to 49%
Government
route beyond
49% and up to
74%

5.2.11.5

Setting up hardware facilities such as up-linking, HUB etc.

 

 

 

(1) Setting up of Up-linking HUB/ Teleports

49% (FDI & FII)

Government

 

(2) Up-linking a Non-News & Current Affairs TV Channel

100%

Government

 

(3) Up-linking a News & Current Affairs TV Channel subject to the condition that the portfolio
investment from FII/ NRI shall not be “persons acting in concert” with FDI investors, as defined in the SEBI(Substantial Acquisition of Shares and Takeovers) Regulations,1997

26% (FDI & FII)

Government

5.2.12

Commodity Exchanges

 

 

5.2.12.2

Policy for FDI in Commodity Exchange

49% (FDI & FII)
[Investment by
Registered FII under Portfolio Investment
Scheme (PIS) will be limited to 23% and Investment
under FDI Scheme limited to 26% ]

Government

5.2.13

Development of Townships, Housing, Built-up infrastructure and Construction-development
projects

 

 

5.2.13.1

Townships, housing, built-up infrastructure and constructiondevelopment projects (which would include, but not be restricted to, housing, commercial premises, hotels, resorts, hospitals, educational institutions, recreational facilities, city and regional level infrastructure)

100%

Automatic

5.2.14

Credit Information Companies (CIC)

 

 

5.2.14.1

Credit Information Companies

49% (FDI & FII)

Government

5.2.15

Industrial Parks - both setting up and already established Industrial Parks

100%

Automatic

5.2.16

Insurance

 

 

5.2.16.1

Insurance

26%

Automatic

5.2.17

Infrastructure Company in the Securities Market

 

 

5.2.17.1

Infrastructure companies in Securities Markets, namely, stock exchanges, depositories and clearing
corporations, in compliance with SEBI Regulations

49% (FDI & FII)
[FDI limit of 26 per cent and an FII limit of 23 per cent of the
paid-up capital ]

Government

5.2.18

Non-Banking Finance Companies (NBFC)

 

 

 

Foreign investment in NBFC is allowed under the automatic route inonly the following activities:
(i) Merchant Banking
(ii) Under Writing
(iii) Portfolio Management
Services
(iv)Investment Advisory Services
(v) Financial Consultancy
(vi)Stock Broking
(vii) Asset Management
(viii) Venture Capital
(ix) Custodian Services
(x) Factoring
(xi) Credit Rating Agencies
(xii) Leasing & Finance
(xiii) Housing Finance
(xiv) Forex Broking
(xv) Credit Card Business
(xvi) Money Changing Business
(xvii) Micro Credit
(xviii) Rural Credit

100%

Automatic

5.2.19

Petroleum & Natural Gas Sector

 

 

5.2.19.1

Exploration activities of oil and natural gas fields, infrastructure related to marketing of petroleum products and natural gas, marketing of natural gas and petroleum
products, petroleum product pipelines, natural gas/pipelines, LNG Regasification infrastructure, market
study and formulation and Petroleum refining in the private sector, subject to the existing sectoral policy and
regulatory framework in the oil marketing sector and the policy of the Government on private participation in exploration of oil and the discovered fields of national oil
companies

100%

Automatic

5.2.19.2

5.2.19.2 Petroleum refining by the Public Sector Undertakings (PSU), without any disinvestment or dilution of domestic equity in the existing PSUs.

49%

Government

5.2.20

Print Media

 

 

5.2.20.1

Publishing of Newspaper and periodicals dealing with news and current affairs

26% (FDI and
investment by
NRIs/PIOs/FII)

Government

5.2.20.2

Publication of Indian editions of foreign magazines dealing with news and current affairs

26% (FDI and
investment by
NRIs/PIOs/FII)

Government

5.2.20.3

Publishing/printing of Scientific and Technical Magazines/specialty journals/ periodicals, subject to
compliance with the legal framework as applicable and guidelines issued in this regard from time to time by
Ministry of Information and Broadcasting.

100%

Government

5.2.20.4

5.2.20.4 Publication of facsimile edition of foreign newspapers

100%

Government

5.2.21

Security Agencies in Private sector

 

 

5.2.22

Satellites – Establishment and operation

 

 

5.2.22.1

Satellites – Establishment and operation, subject to the sectoral guidelines of Department of Space/ISRO

74%

Government

5.2.23

Telecommunication

 

 

5.2.23.1

(i) Telecom services

74%

Automatic up to 49%
Government
route beyond
49% and up to 74%

5.2.23.2

(a) ISP with gateways
(b) ISP’s not providing gateways i.e without gate-ways (both for satellite and marine cables)

74%

Automatic up to 49%
Government
route beyond
49% and up to 74%

5.2.23.3

(a) Infrastructure provider providing dark fibre, right of way, duct space, tower (IP Category I)
(b)Electronic Mail
(c) Voice Mail

100%

Automatic up
to 49%
Government
route beyond
49%

5.2.24

5.2.24 Trading

 

 

5.2.24.1

(i) Cash & Carry Wholesale Trading/ Wholesale Trading (including sourcing from MSEs)

100%

Automatic

5.2.24.2

E-commerce activities

100%

Automatic

5.2.24.3

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 facility commences simultaneously with test marketing.

100%

Government

5.2.24.4

Single Brand product trading

51%

Government

5.2.25

Courier services for carrying packages, parcels and other items which do not come within the ambit of the Indian Post Office Act, 1898.

100%

Government

 

Note: There are many other conditions which are applicable by sector to sector and that can not be illustrated and explain fully. The policies are may change or amend. The above information is subject to other conditions which are described in details in FDI policies and rules governed and change time to time.

 

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