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Modi government to consider easing rules in these sectors

The government is considering further easing foreign direct investment (FDI) rules in a few sectors, including construction and food retail, a senior government official said on Wednesday. The government currently permits 100% FDI in only developed plots where the basic trunk infrastructure is in place. A meeting was attended by senior officials of various ministries, including finance, industry, urban development and health.

The Ministry of Industry may approach the Cabinet on these proposals soon. In the retailing of food products, the food processing ministry has proposed allowing domestically-produced non-food items worth 25% of a foreign retailer’s investment at the farm-gate level. Among other proposals, the government has been considering allowing up to 100% FDI through the automatic route in single-brand retail.

Beyond 49%, government approval is required presently. Presenting the Budget for 2017-18, finance minister Arun Jaitley had said the government would be considering further easing FDI rules. The central government had already announced two big rounds of relaxations in the FDI regime, first in November 2015 and then in June last year, easing rules in over a dozen sectors ranging from real estate, pharmaceuticals, food marketing, aviation, defence to e-commerce and banking.

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