India’s New Simplified FDI Policy Highlights

Apr. 7 – As previously mentioned here and here, the Indian government has simplified some foreign direct investment policies that affect investment coming into the country. These are largely to be welcomed.

Here we highlight the items that are likely to affect the majority of foreign investors into India.

The general sectors now included in the 100 percent FDI automatic route are:

Advertising
The film industry (financing, production, distribution, exhibition, marketing and related activities)
Health and medical services
Data processing, including software development, computer consultancy, software supply, business and management consultancy, market research, technical testing and analysis
Research and development services (excluding awarding of certificates)

The infrastructure sector will permit 100 percent FDI automatic route in the following areas:

Construction and maintenance of roads, rail-beds, bridges, tunnels, pipelines, rope ways, runways, waterways and reservoirs, hydroelectric plants, power plants, industrial plants
Roads and highways on BOT and toll collection models; rural drinking water supply projects, package water treatment plants, rain and rain water harvesting, waste water recycling and re-use facilities
Ports and harbor construction and maintenance of container terminals, bulk-break and specialized cargo berths, warehousing, container freight stations, storage facilities and tanks, captive power plants, dry docking and ship repair, and captive facilities for port-based facilities

Lastly, the power sector is also permitting 100 percent FDI automatic route in the following:

Generation and transmission of electrical energy produced via hydroelectric, coal-ignition, thermal, oil based and gas based power plants
Non-conventional energy generation and distribution
Distribution of electricity to households and industrial and commercial users and power trading

Dezan Shira & Associates provides foreign direct advice and assistance in India. Please e-mail the firm at india@dezshira.com for more information.

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