Foreign Investment

Foreign Direct Investment

Prior to coming to India for setting up business, the foremost step that an entrepreneur should undertake is to get an idea about the sectors of business available for investment and also, even if permitted by the government, then up to what extent. To understand this aspect, the Foreign Direct Policy of the government comes into play. According to the FDI Policy, there are two routes available for the Foreign Individuals/Body Corporates to enter into India.

Automatic Route

Simply speaking, under Automatic Route, there is no requirement of obtaining approval from Government authorities for establishing or making investment in prescribed list of sectors. The list of such sectors is mentioned below:-

1. Agriculture
2. Plantation Sector
3. Mining and Exploration of metal and non-metal ores
4. Mining – Coal & Lignite
5. Manufacturing
6. Broadcasting Carriage Services (Teleports, DTH, Cable Networks, Mobile TV, HITS)
7. Broadcasting Content Service – Up-linking of Non-‘News & Current Affairs’ TV Channels/ Down-linking of TV Channels
8. Airports – Greenfield and Brownfield
9. Air Transport Service – Non Scheduled
10. Air Transport Service -Helicopter Services/ Seaplane Services
11. Other services under Civil Aviation Sector–Ground Handling Services
12. Other services under Civil Aviation Sector–Maintenance and Repair organizations; flying training institutes; and technical training institutions
13. Construction Development
14. Industrial Parks -new and existing
15. Trading – Wholesale, E-commerce activities
16. Trading – SBRT
17. Duty Free Shops
18. Railway Infrastructure*
19. Asset Reconstruction Companies
20. Credit Information Companies
21. White Label ATM Operations
22. Other Financial Services
23. Pharmaceuticals – Greenfield
24. Petroleum & Natural Gas -Exploration activities of oil and natural gas fields
25. Petroleum refining by PSUs
26. Infrastructure Company in the Securities Market
27. Insurance
28. Pension
29. Power Exchanges

Goverment Route

FDI proposals in certain sectors of business must be first approved by the Government as they tend to be regulated on account of national security, protection to domestic industry etc. The list of such sectors is discussed below:-

1. Mining and mineral separation of titanium bearing minerals and ores
2. Food Product Retail Trading
3. Defence
4. Publishing/printing of scientific and technical magazines/specialty journals/ periodicals
5. Publication of facsimile edition of foreign newspapers
6. Print Media – Publishing of newspaper and periodicals dealing with news and current affairs
7. Print Media – Publication of Indian editions of foreign magazines dealing with news and current affairs
8. Air Transport Service – Scheduled, and Regional Air Transport Service,
9. Investment by Foreign Airlines
10. Satellites- establishment and operation
11. Telecom Services
12. Pharmaceutical – Brownfield
13. Banking- Private Sector
14. Banking- Public Sector
15. Private Security Agencies
16. Broadcasting Content Service
17. a) FM Radio
18. b) Up linking of ‘News & Current Affairs’ TV Channels
19. Trading – MBRT

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