Centre notifies relaxed foreign investment norms in key sectors

The Centre has notified the relaxed norms on foreign direct investment in nine sectors announced earlier this week.

In food processing, 100 per cent FDI will be permitted under the government-approval route for trading, including through e-commerce, in respect of food products manufactured or produced in India, a note issued by the Department of Industrial Policy and Promotion (DIPP) said on Friday. “Applications for FDI in food retail will be vetted by the DIPP first before being considered by the government for approval,” the statement adds.

Focus on food Retail giants including Walmart are likely to invest in food retail following the notification of norms. “We have just seen the press note issued by the government today. We are going to evaluate it immediately,” said Krish Iyer, President and CEO, Walmart India.

In defence, the government has dropped the condition of access to ‘state-of-the-art’ technology for FDI beyond 49 per cent. While FDI up to 49 per cent is allowed through the automatic route, for higher foreign investments, investors have to go through government-approval route.

Single-brand retail In single-brand retail, the Centre has tightened rules by allowing a three-year exemption to companies selling ‘cutting-edge’ technology items from the mandatory local sourcing of 30 per cent inputs. The rules allow flexibility to all firms in meeting sourcing norms in the first five years. Companies can meet the norms as an average of goods purchased in the five-year period, after which it has to be met annually.

Relaxations in FDI norms in pharma, civil aviation, broadcasting and private security agencies have also been notified.