Aiming to improve the investment climate, Union Cabinet has allowed big reforms in foreign investment in easing norms for investment in single brand retail, construction and power exchanges. The decision was taken by the Union Cabinet headed by Prime Minister Narendra Modi here.
According to an official release, the government has relaxed the norms for foreign direct investment (FDI) policy for medical devices and audit firms associated with companies receiving foreign funds. In a move that will give a boost to foreign retailers like Ikea, the government approved 100 per cent FDI under the automatic route for single brand retail trading. Earlier also 100 per cent FDI was allowed in the segment, but it required government approval.
Amendments in the FDI policy are intended to liberalise and simplify the policy so as to provide ease of doing business in the country. In turn, it will lead to larger FDI inflows contributing to growth of investment, income and employment’.
The decision to allow foreign airlines to invest up to 49 per cent under approval route in Air India comes in the backdrop of government’s plans to disinvest the state-owned carrier.
Foreign investment(s) in Air India including that of foreign airline(s) shall not exceed 49 per cent either directly or indirectly substantial ownership and effective control of Air India shall continue to be vested in Indian National.