The opening of the doors have been further widened for Foreign Investors. The Union Cabinet which met on Wednesday has endorsed further relaxation in the Foreign Direct Investment Norms for various sectors, besides throwing open new ones. Number of areas have been placed under the Automatic Approval Route.
LIBERALISTION OF EXISTING NORMS: Continuing the liberalization process carried o out over the years, the policy has done away with 26% compulsory equity disinvestment in FUEL AND GAS TRADING Ventures. The ceiling in PUBLIC SECTOR REFINIERIES has been enhanced to 49% from the existing cap of 26%. To boost the growth of INDUSTRIAL SHEDS, the foreign investors have been exempted from certain regulatory norms. These norms relate to minimum capitalization and three years lockin period. Besides, norms have also been relaxed for CONSTRUCTION DEVELOPMENT PROJECTS. In effect, the Investments by the Foreign Institutional Investors FIIs) would be outside the purview of the restrictions applied to foreign direct investment.
NEW AREAS: COMMODITY EXCHANGES, CREDIT INFORMATION AND AIRCRAFT MAINTENANCE are the new areas that have been thrown open for FDI. 100% investment in MINIING OF TITANIUM BEARING MINERALS, 49% in CREDIT INFORMATION COMPANIES, subject to the approval of RBI and 100% IN MAINTENANCE, REPAIR AND OVERHAULING (MRO) aircraft companies as well as aviation units i.e., 23 would be permitted. The 49% ceiling in COMMODITY EXCHANGES is divided into two; 23% for FDI and 26% for FII. No single investor would be permitted to hold more than 5% stake. For CREDIT RATING INFORMATION SERVICES, the FIIs would be be allowed to invest unto 24% in the STOCKS of firms listed in Stock Exchanges subject to the overall investment limit of 49%.
The new norms are considered to be conducive for the inflow of the investments which is expected to touch US$30BILLION during this fiscal year.