FDI Approval Route in India

FDI Approval Route in India

Sectors under Government Route

FDI in activities not covered under the automatic route require prior government approval. Approval of all such proposals including composite proposals involving foreign investment/foreign technical collaboration is granted on the recommendations of Foreign Investment Promotion Board (FIPB).

Sector/ Activity

% Allowed

ROUTE

 Tea Plantation- Tea sector including tea plantations

100%

Government

Mining and mineral separation of titanium bearing minerals and ores, its value addition and integrated activities

100%

Government

Defence Industry- subject to Industrial license

26%

Government

Terrestrial Broadcasting FM (FM Radio), subject to such terms and conditions, as specified from time to time, by Ministry of Information & Broadcasting, for grant of permission for setting up of FM Radio stations.

26%

Government

Up-linking of ‘News & Current Affairs’ TV Channels

26%

Government

Up-linking a Non-‘News & Current Affairs’ TV Channels / Down- linking of TV Channels

100%

Government

Print Media

 

 

Publishing of Newspaper and periodicals dealing with news and current affairs

26%(NRI/PIO/FII)

Government

Publication of Indian editions of foreign magazines dealing with news and current affairs

26%(NRI/PIO/FII)

Government

Publishing / printing of Scientific and Technical Magazines / specialty journals / periodicals, subject to compliance with the legal framework as applicable and guidelines issued in this regard from time to time by Ministry of Information and Broadcasting

100%

Government

Publication of facsimile edition of foreign newspapers

100%

Government

Airports

 

 

Existing projects

Above 74%

Government

Non-Scheduled Air Transport Service

Above 49% &  up to 74%

Government

Ground Handling Services subject to sectoral regulations and security clearance

Above 49%

Government

Satellites – Establishment and operation

 

Government

Satellites – Establishment and operation, subject to the sectoral guidelines of Department of Space / ISRO

74%

Government

Private Security Agencies

49%

Government

Telecom services (including Telecom Infrastructure Providers Category-l)

Above 49%

Government

Single Brand product retail trading

Above 49%

Government

Asset Reconstruction Companies

 

 

Asset Reconstruction Company(ARC) means a company registered with the Reserve Bank of India under Section 3 of the SARFAESI Act

Above 49%

Government

Banking –Private sector

 

 

Banking –Private sector

Above 49% &  up to 74%

Government

Banking- Public Sector subject to Banking Companies (Acquisition & Transfer of Undertakings) Acts 1970/80. This ceiling (20%) is also applicable to the State Bank of India and its associate Banks.

20%(FDI & PIO)

Government

Pharmaceuticals

 

 

Greenfield

100%

Government

Procedure to be followed after investment is made under the Government Route

Application for all FDI cases, except Non-Resident Indian (NRI) investments and 100% Export Oriented Units (EOUs), should be submitted to the FIPB Unit, Department of Economic Affairs (DEA), Ministry of Finance.

Application for NRI and 100% EOU cases should be presented to SIA in Department of Industrial Policy and Promotion.

Application can be made in Form FC-IL. Plain paper applications carrying all relevant details are also accepted. No fee is payable. The guidelines for consideration of FDI proposals by the FIPB are at Annexure-III of the Manual for FDI.

A two-stage reporting procedure has to be followed:

ON RECEIPT OF SHARE APPLICATION MONEY:

Within 30 days of receipt of share application money/amount of consideration from the non-resident investor, the Indian company is required to report to the Foreign Exchange Department, Regional Office concerned of the Reserve Bank of India under whose jurisdiction its Registered Office is located, the Advance Reporting Form, containing the following details:

  • Name and address of the foreign investor
  • Date of receipt of funds and the Rupee equivalent
  • Name and address of the authorised dealer through whom the funds have been received
  • Details of the Government approval, if any
  • KYC report on the non-resident investor from the overseas bank remitting the amount of consideration.

The Indian company has to ensure that the shares are issued within 180 days from the date of inward remittance which otherwise would result in the contravention / violation of the FEMA regulations.

UPON ISSUE OF SHARES TO NON-RESIDENT INVESTORS:

Within 30 days from the date of issue of shares, a report in Form FC-GPR- PARTA together with the following documents should be filed with the Foreign Exchange Department, Regional Office concerned of the Reserve Bank of India.

Certificate from the Company Secretary of the company accepting investment from person resident outside India certifying that:

  • The company has complied with the procedure for issue of shares as laid down under the FDI scheme.
  • Shares have been issued in terms of SIA/FIPB approval No. ——————— dated ——————– (enclose the FIPB approval copy)
  • Certificate from Statutory Auditors/ SEBI registered Merchant Banker / Chartered Accountant indicating the manner of arriving at the price of the shares issued to the persons resident outside India.
  • Certificate from Statutory Auditors/ SEBI registered Merchant Banker / Chartered Accountant indicating the manner of arriving at the price of the shares issued to the person resident outside India.

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