2.
Prohibition on investment into India –
Investments
into India is not permissible in the following cases
- Business
of chit fund, or
- Nidhi Company , or
- Agricultural or plantation
activities or
- Real estate business, or construction of farm houses
- Trading
in Transferable Development Rights (TDRs).
- Retail Trading
- Atomic
Energy
- Lottery Business
- Gambling and Betting
- Housing and
Real Estate business
- Agriculture (excluding Floriculture, Horticulture,
Development of Seeds, Animal Husbandry, Pisiculture and Cultivation of Vegetables,
Mushrooms etc. under controlled conditions and services related to agro and allied
sectors) and Plantations(other than Tea plantations)
3.
In other cases investments can be made either with the specific prior approval
of the Government of India, the Secretariat for Industrial Assistance/Foreign
Investment Promotion Board (SIA/FIPB) or under the Automatic route. The list of
the activities requiring the approval of the Government is given in Annex-A (A)
to Schedule 1 to FEMA Notification No 94 and details of the activities/sectors
which are covered under the automatic route is given as Annexure-B to the said
Schedule. The Automatic Route is not open for those non-resident investors who
have/had a previous financial/technical/ trademark collaboration in an existing
domestic company engaged in the same or allied activity. If the activity or manufacturing
item of the issuer company requires an Industrial License under the provisions
of the Industries (Development and Regulation) Act, 1951 or under the locational
policy notified by Government of India under the Industrial Policy Resolution
1991 or the investment is sought in excess of the prescribed sectoral limits Automatic
Route is not available and in such cases, specific approval of FIPB would be required.
4.
Eligibility for Investing in India
A
person resident outside India (other than a citizen of Pakistan, Sri Lanka or
Bangladesh) or an incorporated entity outside India, (other than an entity in
Bangladesh or Pakistan) has the general permission to purchase shares or convertible
debentures or preference shares of an Indian company subject to certain terms
and conditions
5.
Nature of Investments
5.1
The Indian companies also have general permission to issue partly convertible
debentures/ partly convertible preference shares subject to certain conditions.
Companies can issue NCDs only to NRIs/PIO by means of a public issue only. The
coupon rate on partly convertible preference shares/partly convertible debentures
should not exceed SBI’s prime lending rate plus 300 basis points.
5.2
Trading is permitted under automatic route with FDI upto 51 % provided the Indian company is primarily engaged in export activities, and the undertaking is an export
house/trading house/super trading house/star trading house. Government also permits
certain trading activities under FIPB route, as mentioned in Annexure `B' to Notification
No. FEMA 94/2003-RB dated 18th June 2003.
5.3
A company which is a small scale industrial unit and which is not engaged in any
activity or in manufacture of items included in Annexure A (A) to Notification
No.94, may issue shares or convertible debentures to a non-resident, to the extent
of 24% of its paid-up capital. Such a company may issue shares in excess of 24%
of its paid-up capital if
- It has given
up its small scale status,
- It is not engaged
or does not propose to engage in manufacture of items reserved for small scale
sector, and
- It complies with the ceilings specified
in Annexure B to Notification No.94.
5.4
An Export Oriented Unit or a unit in Free Trade Zone or in Export Processing
Zone or in a Software Technology Park or in an Electronic Hardware Technology
Park may issue shares or convertible debentures to a person resident outside India
in excess of 24 % provided it conforms to the ceilings specified in Annexure B
to Notification No. 94.
6.
General Permissions granted under the Regulations
6.1 Issue
of Rights/Bonus shares
General permission is also available
to Indian companies to issue Right/Bonus shares subject to certain conditions.
As clarified in terms of AP DIR(SERIES) Circular No 14 dated 16th September
2003, entitlement of rights shares is not automatically available to investors
who have been allotted such shares as OCBs. Such issuing companies would have
to seek specific permission from RBI, Foreign Exchange Department, Foreign Investment
Division, Central Office, Mumbai for issue of shares on right basis to erstwhile
OCBs. However, bonus shares can be issued to OCBs.
6.2
Acquisition of shares under Scheme of Amalgamation/merger
Where
a Scheme of merger or amalgamation of two or more Indian companies has been approved
by a court in India, the transferee company may issue shares to the shareholders
of the transferor company, resident outside India subject to ensuring that the
percentage of shareholding of persons resident outside India in the transferee
or new company does not exceed the percentage specified in the approval granted
by the Central Government or the Reserve Bank. The transferor company or the transferee
or new company should not be engaged in activities prohibited in terms of FDI
policy viz agriculture, plantation or real estate business or trading in TDRs.
6.3
Issue of shares under Employees Stock Option Scheme
A
company may issue shares under the Employees Stock Option Scheme, to its employees
or employees of its joint venture or wholly owned subsidiary abroad who are resident
outside India, directly or through a Trust subject to the condition that the scheme
has been drawn in terms of relevant regulations issued by the Securities Exchange
Board of India; and face value of the shares to be allotted under the scheme to
the non-resident employees does not exceed 5% of the paid-up capital of the issuing
company.
6.4 Issue of shares by Indian companies
under ADR/GDR
6.4.1 An Indian corporate can
raise foreign currency resources abroad through the issue of American Depository
Receipts (ADRs) or Global Depository Receipts (GDRs). Regulation 4 of Schedule
I of FEMA Notification no. 20 allows an Indian company to issue its Rupee denominated
shares to a person resident outside India being a depository for the purpose of
issuing Global Depository Receipts (GDRs) and/ or American Depository Receipts
(ADRs), subject to the conditions that:
- the ADRs/GDRs
are issued in accordance with the Scheme for issue of Foreign Currency Convertible
Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993
and guidelines issued by the Central Government thereunder from time to time
- The
Indian company issuing such shares has an approval from the Ministry of Finance,
Government of India to issue such ADRs and/or GDRs or is eligible to issue ADRs/
GDRs in terms of the relevant scheme in force or notification issued by the Ministry
of Finance, and
- Is not otherwise ineligible
to issue shares to persons resident outside India in terms of these Regulations.
These instruments are issued by a Depository
abroad and listed in the overseas stock exchanges like NASDAQ. The proceeds so
raised have to be kept abroad till actually required in India. There are no end
use restrictions except for a ban on deployment/ Investment of these funds in
Real Estate and the Stock Market. There is no limit upto which an Indian company
can raise ADRs/GDRs. However, the Indian company has to be otherwise eligible
to raise foreign equity under the extant FDI policy.
6.4.2
The ADR/GDR can be issued on the basis of the ratio worked out by the Indian
company in consultation with the Lead Manager of the issue. The Indian company
will issue its rupee denominated shares in the name of the Overseas Depository
and will keep in the custody of the domestic Custodian in India. On the basis
of the ratio worked out and the rupee shares kept with the domestic Custodian,
the Depository will issue ADRs/GDRs abroad.
6.4.3
A limited Two-way Fungibility scheme has been put in place by the Government of
India for ADRs/GDRs. Under this scheme, a stock broker in India, registered with
SEBI, can purchase the shares from the market for conversion into ADRs/GDR. Re-issuance
of ADRs/GDR would be permitted to the extent of ADsRs/GDRs which have been redeemed
into underlying shares and sold in the domestic market.
6.4.4
An Indian company can also sponsor an issue of ADR/GDR. Under this mechanism,
the company offers its resident shareholders a choice to submit their shares back
to the company so that on the basis of such shares, ADRs/GDRs can be issued abroad.
The proceeds of the ADR/GDR issue is remitted back to India and distributed among
the resident investors who had offered their rupee denominated shares for conversion.
These proceeds can be kept in foreign currency accounts in India by the shareholders
who have tendered such shares for conversion into ADR/GDR.
6.4.5
The ADR/GDR/FCCB proceeds may be utilised in the first stage acquisition of shares
in the disinvestment process and also in the mandatory second stage offer to the
public in view of their strategic importance.
ADs have been
permitted to allow Indian companies to prepay the existing FCCB subject to certain
conditions.
6.4.6 Reporting of such Issues
The
Indian company issuing shares shall furnish to the Reserve Bank, full details
of such issue in the form specified in Annexure C to Notification No.FEMA 20/2000-RB
dated May 3,2000 within 30 days from the date of closing of the issue .The company
should also furnish a quarterly return in the form specified in Annexure D to
Reserve Bank within 15 days of the close of the calendar quarter.
7.
Transfer of Shares and convertible debentures -Non-resident to Resident/Resident
to Non-Resident- General Permission
7.1 General
permission has been granted to non-residents/NRIs for transfer of shares and convertible
debentures of an Indian company as under:-
- A person
resident outside India ( Other than NRI and OCB) may transfer by way of sale or
gift the shares or convertible debentures to any person resident outside India
( including NRIs); provided transferee has obtained prior permission of SIA/FIPB
to acquire the shares if he has previous venture or tie-up in India through investment
in shares or convertible debentures or a technical collaboration or a trade mark
agreement or investment in the same field or allied field in which the Indian
company whose shares are being transferred, is engaged.
- NRI
or OCB may transfer by way of sale or gift the shares or convertible debentures
held by him or it to another non-resident Indian; provided transferee has obtained
prior permission of Central Government to acquire the shares if he has previous
venture or tie-up in India through investment in shares or convertible debentures
or a technical collaboration or a trade mark agreement or investment in the same
field or allied field in which the Indian company whose shares are being transferred,
is engaged.
- The person resident outside India
may transfer any security to a person resident in India by way of gift.
- A
person resident outside India may sell the shares and convertible debentures of
an Indian company on a recognised Stock Exchange in India through a registered
broker.
7.2 Prior permission of RBI in certain
cases for transfer of Shares/convertible debentures
A
person resident in India who proposes to transfer any share or convertible debenture
of an Indian company by way of sale or gift to a person resident outside India
will have to obtain prior approval of FIPB, Ministry of Finance & Company
Affairs, Govt of India followed by permission from RBI. The above two stage approval
are applicable even when the transfer is made on non-repatriation basis. A person
resident outside India holding shares/convertible debentures of an Indian company
may transfer by way of sale to a person resident in India by obtaining prior permission
from RBI in form TS 1.
7.3 Issue
Price.
Price of shares issued to persons resident outside
India under Schedule-I, would be worked out on the basis of SEBI guidelines in
case of listed shares. In other cases valuation of shares would be done by a Chartered
Accountant in accordance with the guidelines issued by the erstwhile Controller
of Capital Issues.
7.4 Reporting
Advance
Reporting
An Indian company issuing shares or convertible
debentures under bonus, rights, amalgamation and stock option in accordance with
these Regulations should submit to Reserve Bank the details of advance remittance,
not later than 30 days from the date of receipt of the amount of consideration
, giving details regarding
- Name and address of
the foreign investors
- Date of receipt of funds
and their rupee equivalent
- Name and address
of the authorised dealer through whom the funds have been received, and
- Details
of the Government approval, if any
8.
Reporting Issue of Shares
After
the issue of shares the company should file a report in Form FC-GPR not later
than 30 days from the date of issue of shares with the Regional Office of RBI
where the registered office of the company is situated.
9.
Permission for retaining share subscription money received from persons resident
outside India in a foreign currency account.
Reserve
Bank may, permit an Indian company issuing shares to persons resident outside
India under Schedule I to FEMA Notification No. 20 (i.e. under the FDI scheme)
, to retain the subscription amount in a foreign currency account, subject to
such terms and conditions as it may stipulate.
10.
Portfolio Investment Scheme.
10.1
Foreign Institutional Investors registered with SEBI and Non-resident Indians
are eligible to purchase the shares and convertible debentures under the Portfolio
Investment Scheme. The FII should apply to the designated AD who may then grant
permission to FII for opening a foreign currency account and/or a Non Resident
Rupee Account .
NRIs should apply to the concerned AD designated
bank for permission to open a NRE/NRO account with its designated branch.
10.2
Investment by Foreign Institutional Investors (Schedule 2)
10.2.1 In
the case of FIIs, the total holding of each FII/SEBI approved sub account shall
not exceed 10% of the total paid up capital or 10% of the paid up value of each
series of convertible debentures issued by an Indian company and the total holdings
of all FIIs/sub-accounts of FIIs put together shall not exceed 24% of the paid-up
capital or paid-up value of each series of convertible debentures. This limit
of 24% can be increased to the sectoral cap/statutory limit as applicable to the
Indian company concerned by passing a resolution by its Board of Directors followed
by passing of a special resolution to that effect by its General Body.
10.2.2 The
FIIs are also permitted to trade in all exchange traded derivative contracts subject
to certain limits. ADs can also offer forward cover to FIIs to the extent of total
inward remittance net of liquidated investments. FIIs are not permitted to
invest in Print Media Sector through FDI or PIS routes. Such investment by
FII requires prior approval of Government of India, Foreign Investment Promotion
Board and Ministry of Information & Broadcasting.
10.2.3
Registered FIIs have been permitted to purchase shares/convertible debentures
of an Indian company through offer / private placement. This is subject to applicable
ceiling as indicated in Schedule 2 to Notification No. FEMA 20/2000-RB dated May
3,2000. It is clarified that a FII may invest in a particular issue of an Indian
company either under Schedule 1 or Schedule 2. The ADs may ensure that the FIIs
who are purchasing the shares by debit to the special rupee accounts report these
details separately in the LEC (FII ) returns. The company who has issued the shares
to the FIIs under Schedule 1 (FDI) ( for which the payment has been received directly
into company’s account ) and under Schedule 2 ( for which the payment has been
received from FIIs account maintained with Authorised Dealer in India ) should
report these figures separately under item 4(b) of the FC-GPR return so that the
details could be suitably reconciled for statistical / monitoring purposes.
10.3
The FII shall restrict allocation of its total investment between equities
and debt including dated Government Securities and Treasury Bills in the Indian
Capital Market in the ratio of 70:30. The FII can also form a 100% Debt Fund and
get registered with SEBI for investment in debt investments. Investment in debt
securities by FIIs are subject to limits, if any, stipulated by SEBI in this regard.
10.4.
Investments by NRIs
In the
case of NRIs under PIS it is to be ensured that the paid-up value of shares/ convertible
debentures purchased by an NRI under PIS route should not exceed 5% of the paid
up capital/ paid up value of each series of debentures. The aggregate paid-up
value of shares/ convertible debentures purchased by all NRIs should not exceed
10% of the paid-up capital of the company/paid-up value of series of debentures
of the company. The aggregate ceiling of 10% can be raised to 24%, if the General
Body of the Indian company concerned passes a special resolution to that effect.
The NRI investor should take delivery of the shares purchased and give delivery
of shares sold. Payment for purchase of shares and/or debentures is made by inward
remittance in foreign exchange through normal banking channels or out of funds
held in NRE/FCNR account maintained in India if the shares are purchased on repatriation
basis and by inward remittance or out of funds held in NRE/FCNR/NRO account of
the NRI concerned, maintained in India where shares/debentures are purchased on
non-repatriation basis.
10.5. Reporting
The
link office of the designated branch of an AD shall furnish to the CGM, RBI, ECD,
CO, Mumbai a report on a daily basis on PIS transactions undertaken by it, such
report to be furnished on-line or on a floppy in a format supplied by RBI.
10.6.
NRI may invest in Exchange Trade Derivative Contracts approved by SEBI from
time to time out of INR funds held in India on non-repatriation basis subject
to the limits prescribed by SEBI. NRIs may also purchase on repatriation basis,
Govt dated securities, Treasury bills, units of domestic Mutual funds bonds issued
by public sector undertakings and shares in public sector enterprise being divested
by the Govt of India.
11. With
effect from November 29, 2001, OCBs are not permitted to invest under the PIS
in India. Further, the OCBs that have already made investments under the Portfolio
Investment Scheme, may continue to hold such shares/convertible debentures till
such time these are sold on the stock exchange.
OCBs
have been derecognised as a class of investor entity in India with effect from
September 16 2003. However, requests from such entities which are incorporated
and not under the adverse notice of RBI/SEBI will be considered for undertaking
fresh investments under FDI scheme with prior approval of Government if the investment
is under Govt. route and with the prior approval of RBI if the investment is under
automatic route.
12.
Purchase of other securities (Schedules 4 and 5)
12.1
There is no limit on NRI purchasing shares/ convertible debentures issued by an
Indian company on non-repatriation basis whether by public issue or private placement.
Amount of consideration for such purchase shall be paid by inward remittance through
normal banking channels from abroad or out of funds held in NRE/FCNR/NRO account
maintained with the AD.
NRI can also, without any limit,
purchase on non-repatriation basis dated Government securities, treasury bills,
units of domestic mutual funds, units of Money Market Mutual Funds.
As notified by Government NRIs are not permitted to make Investments in Small Savings Schemes including PPF.
12.2
Foreign Institutional Investors can buy dated securities/ treasury bills, non-convertible
debentures /bonds issued by Indian companies and units of domestic mutual funds
either directly from the issuer of such securities or through a registered stock
broker on a recognised stock exchange in India.
12.3
NRIs resident in Nepal and Bhutan as well as citizens of Nepal and Bhutan are
permitted to invest in Indian Securities on repatriation basis subject to the
condition that the amount of consideration for such purchase on repatriation basis
shall be paid only by way of inward remittance in free foreign exchange
through normal banking channels or by debit to their NRE/ FCNR(B) accounts.
In
case of investment on non-repatriation basis, the sale proceeds shall be credited
to NRO account. The amount invested under the scheme and the capital appreciation
thereon shall not be allowed to be repatriated abroad.
13.
Investments by Venture Capital Funds (Schedule 6)
A
SEBI registered Foreign Venture Capital Investor (FVCI) with general permission
from RBI under FEMA Regulations can invest in Indian Venture Capital Undertaking
(IVCU) or in a Venture Capital Fund( VCF) or in a Scheme floated by such VCFs
subject to the condition that the VCF should also be registered with
SEBI. They can purchase equity/equity linked instruments/ debt/debt instruments,
debentures of an IVCU or of a VCF through initial public offer or private placement
or in units of schemes/ funds set up by a VCF. RBI, on application, may permit a FVCI to open a foreign currency account or rupee account with a designated branch
of an authorised dealer. The purchase/ sale of shares, debentures, units can be
at a price that is mutually acceptable to the buyer and the seller /issuer. ADs
are also authorised to offer forward cover to FVCIs to the extent of total inward
remittance net of investments liquidated.
Investments
Facilities in Brief:
| Sector |
Investment Cap |
Description of Activity / Items /
Conditions |
| 1.
Private Sector Banking * | 49% |
Subject to guidelines issued by RBI
from time to time |
| 2.
Non-Banking Financial Companies | 100% |
FDI/NRI investments allowed in the
following 19 NBFC activities shall be as per the levels indicated below : a)
Activities covered : - Merchant Banking
- Under
writing
- Portfolio Management Services
- Investment Advisory Services
- Financial Consultancy
- Stock-broking
- Asset Management
- Venture
Capital
- Custodial Services
- Factoring
- Credit Reference
Agencies
- Credit Rating Agencies
- Leasing & Finance
- Housing
Finance
- Forex-broking
- Credit Card Business
- Money-changing
Business
- Micro-credit
- Rural credit
b)
Minimum Capitalisation norms for fund based NBFCs i) for
FDI upto 51%, US $ 0.5 million to be brought in upfront ii)
If the FDI is above 51 % and upto 75 %, US $ 5 million to be brought upfront iii)
If the FDI is above75 % and upto 100 %, US $ 50 million out of which $ 7.5 million
to be brought in upfront and the balance in 24 months c)
Minimum Capitalisation norms for non-fund based activities. Minimum
Capitalisation norm of US$0.5 million is applicable in respect of non-fund based
NBFCs with foreign investment. d) Foreign investors
can set up 100% operating subsidiaries without the condition to disinvest a minimum
of 25% of its equity to Indian entities, subject to bringing in US $ 50 million
as at b) (iii) above ( without any restriction on number of operating subsidiaries
without bringing in additional capital) e) Joint Venture
operating NBFCs that have 75% or less than 75% foreign investment will also be
allowed to set up subsidiaries for undertaking other NBFC activities , subject
to the subsidiaries also complying with the applicable
minimum capital inflow i.e, (b)(i) and (b)(ii) above. f)
FDI in the NBFC sector is put on automatic route subject to compliance with guidelines
of the Reserve Bank of India. RBI would issue appropriate guidelines in this regard |
| 3. Insurance |
26% |
FDI upto 26% in the Insurance sector
is allowed on the automatic route subject to obtaining licence from Insurance
Regulatory & Development Authority(IRDA) |
|
4. Telecommunications |
49 % |
- In basic, Cellular,
Value Added Services, and Global Mobile Personal Communications by Satellite,
FDI is limited to 49% subject to licencing and security requirements and adherence
by the companies (who are investing and the companies in which the investment
is being made ) to the license conditions for foreign equity cap and lock-in period
for transfer and addition of equity and other license provisions.
- ISPs
with gateways, radio paging and end-to-end bandwidth, FDI is permitted upto74%
with FDI, beyond 49% requiring Government approval. These services would be subject
to licensing and security requirements
- No equity
cap is applicable to manufacturing activities.
- FDI
upto 100% is allowed for the following activities in the telecom sector:
- ISPs not providing gateways
(both for satellite and submarine cables)
- Infrastructure Providers providing
dark fibre (IP Category 1)
- Electronic Mail, and
- Voice Mail
The above would be subject to the following conditions; FDI
upto 100% is allowed subject to the condition that such companies would divest
26% of their equity in favour of Indian public in 5 years, if these companies
are listed in other parts of the world. The above services
would be subject to licencing and security requirements, wherever required. Proposal
for FDI beyond 49% shall be considered by FIPB on case to case basis. |
| 5. Petroleum Refining (Private
Sector) Petroleum Product Marketing Petroleum product pipelines |
100% 100% 100
% | FDI
permitted upto 100 % in case of private Indian companies. Subject
to the existing sectoral policy and regulatory framework in the oil marketing
sector Subject to Govt. policy and regulations |
| 6. Housing and
Real Estate | 100
% | Only
NRIs are allowed to invest upto 100 % in the areas listed below : a)
Development of serviced plots and construction of built-up residential premises b)
Investment in real estate covering construction of residential and commercial
premises including business centres and offices c) Development
of townships d) City and regional level urban infrastructure
facilities, including both roads and bridges e) Investment
in manufacture of building materials f) Investment in participatory
ventures in (a) to (e) above g) Investment in Housing finance
institutions which is also opened to FDI as an NBFC |
|
7. Coal & Lignite | |
i) Private Indian companies setting
up or operating power projects as well as coal and lignite mines for captive consumption
are allowed FDI upto 100%. ii) 100% FDI is allowed for
setting up coal processing plants 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. iii) FDI upto 74% is allowed for exploration
or mining of coal or lignite for captive consumption. iv)
In all the above cases, FDI is allowed upto 50% under the automatic route subject
to the condition that such investment shall not exceed 49%of the equity of a PSU. |
| 8. Venture Capital
Fund (VCF) and Venture Capital Company(VCC) |
|
Offshore Venture Capital Funds/ companies
are allowed to invest in domestic venture capital undertaking as well as other
companies through the automatic route, subject only to SEBI regulations and sector
specific caps on FDI. |
| 9.
Trading | |
Trading is permitted under automatic
route with FDI upto 51% provided it is primarily export activities, and the undertaking
is an export house/ trading house / super trading house/ star trading house. However,
under the FIPB route: (i) 100% FDI is permitted in case
of trading companies for the following activities: - exports;
- bulk
imports with export/ ex-bonded warehouse sales;
- cash
and carry wholesale trading;
- other import of
goods or services provided at least 75% is for procurement and sale of the same
group and not for third party use or onward transfer/ distribution/sales.
ii)
The following kinds of trading are also permitted , subject to provisions of Exim
Policy. - Companies for providing after
sales services( that is not trading per se)
- Domestic
trading of products of JVs is permitted at the wholesale level for such trading
companies who wish to market manufactured products on behalf of their Joint ventures
in which they have equity participation in India
- Trading
of hi-tech items/ items requiring specialised after sales service
- Trading
of items for social sector
- Trading of hi-tech,
medical and diagnostic items.
- Trading of items
sourced from the small scale sector under which, based on technology provided
and laid down quality specifications, a company can market that item under its
brand name
- Domestic sourcing of products for
exports
- 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 facilities
commences simultaneously with test marketing.
- FDI
upto 100% permitted for e-commerce activities subject to the condition that such
companies would divest 26% of their equity in favour of the Indian public in five
years, if these companies are listed in other parts of the world. Such companies
would engage only in business to business (B2B) e-commerce and not in retail trading.
|
| 10. Power |
100% |
FDI allowed upto 100 % in respect
of projects relating to electricity generation, transmission and distribution,
other than atomic reactor power plants. There is no limit on the project cost
and quantum of foreign direct investment. |
|
11. Drugs & Pharmaceuticals |
100 % |
FDI permitted upto 100 % for manufacture
of drugs and pharmaceuticals provided the activity does not attract compulsory
licensing or involve use of recombinant DNA technology and specific cell/tissue
targeted formulations. FDI proposals for the manufacture
of licensable drugs and pharmaceuticals and bulk drugs produced by recombinant
DNA technology and specific cell/tissue targeted formulations will require prior
Govt. approval. |
| 12.
Road and highways, Ports and harbours |
100% |
In projects for construction and
maintenance of roads, highways, vehicular bridges, toll roads, vehicular tunnels,
ports and harbours. |
| 13.
Hotel & Tourism | 100
% | The
term hotels include restaurants, beach resorts and other tourist complexes providing
accommodation and/ or catering and food facilities to tourists. Tourism related
industry include travel agencies, tour operating agencies and tourist transport
operating agencies, units providing facilities for cultural, adventure and wild
life experience to tourists, surface, air and water transport facilities to tourists,
leisure, entertainment, amusement, sports and health units for tourists and Convention/Seminar
units and organisations. For foreign technology agreements,
automatic approval is granted if - Upto
3% of the capital cost of the project is proposed to be paid for technical and
consultancy services including fees for architects, design, supervision, etc.
- Upto
3% of the net turnover is payable for franchising and marketing/publicity support
fee, and
Upto 10% of gross operating profit
is payable for management fee, including incentive fee. |
|
14.Mining |
74 % 100
% | - For
exploration and mining of diamonds and precious stones FDI is allowed upto 74
% under automatic route
- For exploration and
mining of gold and silver and minerals other than diamonds and precious stones,
metallurgy and processing FDI is allowed upto 100 % under automatic route
- Press
Note 18 (1998 series) dated 14/12/98 would not be applicable for setting up 100
% owned subsidiaries in so far as the mining sector is concerned, subject to a
declaration from the applicant that he has no existing joint venture for the same
area and/or the particular mineral.
|
|
15. Advertising |
100 % |
Advertising Sector FDI
upto 100 % allowed on the automatic route |
| 16. Films |
100 % |
Film Sector (Film
production, exhibition and distribution including related services/products) FDI
upto 100 % allowed on the automatic route with no entry-level condition |
| 17. Airports |
74 % |
Govt approval required beyond 74
% |
| 18.
Mass Rapid Transport Systems | 100
% | FDI
upto 100% is permitted on the automatic route in mass rapid transport system in
all metros including associated real estate development |
|
19. Pollution Control & Management |
100 % |
In both manufacture of pollution
control equipment and consultancy for integration of pollution control systems
is permitted on the automatic route |
|
20. Special Economic Zones |
100 % |
All manufacturing activities except: (i) Arms and
ammunition, Explosives and allied items Of defence equipments, Defence aircrafts
and warships, (ii) Atomic substances, Narcotics and Psychotropic Substances and
hazardous Chemicals, (iii) Distillation and brewing of Alcoholic drinks and Cigarette/cigars
and manufactured tobacco substitutes. |
|
21.Any other Sector/Activity (if not included in
Annexure A) | 100
% | |