New Delhi: The Union Cabinet approved 100 per cent foreign direct investment in single brand retail sector; it also approved 49 per cent foreign investment cap in the beleaguered national carrier, Air India.
Apart from single brand retail, the Cabinet also approved 100 per cent FDI in construction development through automatic route. The FDI will be allowed though approval route in Air India.
The decision means that foreign airlines will be able to buy upto 49 per cent stakes in Air India. Foreign single brand retail chains will be allowed to set up their stores in India.
“The Union Cabinet chaired by the Prime Minister Narendra Modi, has given its approval to a number of amendments in the FDI Policy. These are intended to liberalise and simplify the FDI 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 government release read.
Government said in the released that no approval will be required for FDI in single brand retail trading (SRBT).
“Extant FDI policy on SBRT allows 49% FDI under automatic route, and FDI beyond 49% and up to 100% through Government approval route. It has now been decided to permit 100% FDI under automatic route for SBRT,” the release added.
“It has been decided to permit single brand retail trading entity to set off its incremental sourcing of goods from India for global operations during initial 5 years, beginning 1st April of the year of the opening of first store against the mandatory sourcing requirement of 30% of purchases from India,” it added.