DAILY NEWSPAPER ANALYSIS

(DNA)



30 August 2019


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Revised FDI Norms

By Aspire IAS

GS-III: Revised  FDI Norms

News

Recently, the Union Cabinet has approved the proposal for the review of Foreign Direct Investment in various sectors. This will result in making India a more attractive FDI destination, leading to benefits of increased investments, employment and growth.

Revised Norms

  • 100% FDI under automatic route is permitted for sale of coal, for coal mining activities including associated processing infrastructure.
  • The government has allowed 100% FDI through the automatic route for contract manufacturing.
  • It will augment the Make in India initiative and will attract global companies in India looking to establish alternative manufacturing hubs.
  • Easing norms for FDI in Single Brand Retail Trading (SBRT): Retail trading through online trade by SBRT, can also be undertaken prior to the opening of brick and mortar stores (it should be opened within 2 years from the date of start of online retail).
  • Online sales will lead to the creation of jobs in logistics, digital payments, customer care, training and product skilling.
  • It has been decided to permit 26% FDI under government route for uploading/ streaming of News & Current Affairs through Digital Media, on the lines of print media.
  • In India, FDI policy provisions have been progressively liberalized across various sectors in recent years to make India an attractive investment destination.
  • Some of the sectors include Defence, Construction Development, Trading, Pharmaceuticals, Power Exchanges, Insurance, Pension, Other Financial Services, Asset reconstruction Companies, Broadcasting and Civil Aviation.
  • Due to these measures, a total FDI into India from 2014-15 to 2018-19 has been $ 286 billion.
  • Despite the dim global picture (UNCTAD's World Investment Report 2019), India continues to remain a preferred and attractive destination for global FDI flows.
  • India seeks to use this potential to attract far more foreign investment which can be achieved inter-alia by further liberalizing and simplifying the FDI policy regime.