New FDI policy for aviation, petchem, mining unveiled
The government has tweaked the existing FDI policy in 7 sectors, including civil aviation, PSU refineries and commodity exchanges. But by giving contentious issues like FDI in multibrand retail, as also foreign airlines picking up equity in Indian carriers a miss, the government has proved that it does not want any political battles as it prepares for elections.
The FDI policy has been up for review for months now. Finally, the government has made its first move. It has liberalised foreign investment regulations in key sectors, opening up commodity exchanges, credit information services and aircraft maintenance operations. The Cabinet has also approved raising the foreign investment limit in PSU refineries from 26% to 49%, a move that will benefit players like LN Mittal, who has picked up a stake in HPCL’s Bhatinda refinery. An additional sweetener for the likes of Mittal is that the mandatory disinvestment clause within five years has been done away with.
“The government has undertaken a comprehensive review of the FDI policy. This was long pending and today the government has okayed the review in seven sectors,” said Priya Ranjan Dasmunsi, Minister, Parliamentary Affairs.
Civil aviation has seen some changes. FDI up to 74% will now be allowed through the automatic route for non-scheduled and cargo airlines, as also for ground handling activities.
100% FDI in aircraft maintenance and repair operations has also been allowed, a lucrative segment, which is being eyed by many foreign players. But the big one, allowing foreign airlines to pick up a stake in domestic carriers has been given a miss again.
Commodity exchanges like MCX, which have plans for an IPO and are eyeing foreign investment, also have something to cheer about now.
The government has decided to allow 26% FDI and 23% FII investments in commodity exchanges, subject to the proviso that no single entity will hold more than 5% of the stake.
Sectors like credit information companies, industrial parks and construction and development projects have also been opened up to more foreign investment.
Also keeping India's civilian nuclear ambitions in mind, the government has also allowed 100% FDI in mining of titanium, a mineral which is abundant in India.
Sources say the government wants to send out a signal that it is not done with reforms yet. At the same time, critics say contentious issues like FDI and multibrand retail are out of the policy radar because of political compulsions.
The government has tweaked the existing FDI policy in 7 sectors, including civil aviation, PSU refineries and commodity exchanges. But by giving contentious issues like FDI in multibrand retail, as also foreign airlines picking up equity in Indian carriers a miss, the government has proved that it does not want any political battles as it prepares for elections.
The FDI policy has been up for review for months now. Finally, the government has made its first move. It has liberalised foreign investment regulations in key sectors, opening up commodity exchanges, credit information services and aircraft maintenance operations. The Cabinet has also approved raising the foreign investment limit in PSU refineries from 26% to 49%, a move that will benefit players like LN Mittal, who has picked up a stake in HPCL’s Bhatinda refinery. An additional sweetener for the likes of Mittal is that the mandatory disinvestment clause within five years has been done away with.
“The government has undertaken a comprehensive review of the FDI policy. This was long pending and today the government has okayed the review in seven sectors,” said Priya Ranjan Dasmunsi, Minister, Parliamentary Affairs.
Civil aviation has seen some changes. FDI up to 74% will now be allowed through the automatic route for non-scheduled and cargo airlines, as also for ground handling activities.
100% FDI in aircraft maintenance and repair operations has also been allowed, a lucrative segment, which is being eyed by many foreign players. But the big one, allowing foreign airlines to pick up a stake in domestic carriers has been given a miss again.
Commodity exchanges like MCX, which have plans for an IPO and are eyeing foreign investment, also have something to cheer about now.
The government has decided to allow 26% FDI and 23% FII investments in commodity exchanges, subject to the proviso that no single entity will hold more than 5% of the stake.
Sectors like credit information companies, industrial parks and construction and development projects have also been opened up to more foreign investment.
Also keeping India's civilian nuclear ambitions in mind, the government has also allowed 100% FDI in mining of titanium, a mineral which is abundant in India.
Sources say the government wants to send out a signal that it is not done with reforms yet. At the same time, critics say contentious issues like FDI and multibrand retail are out of the policy radar because of political compulsions.