Besides, the clarification that real estate broking service will not amount to real estate business has addressed the issue being faced by such firms.
It has now been chose to do away with this restriction and allow foreign airlines to invest up to 49 per cent under the automatic approval route in Air India as well, the government said in a statement. But opening the floodgates as far as single brand retail trading is concerned, which is bound to dilute norms such as 30% mandatory local purchase, spells trouble ('Business' page - "Centre opens arms to single brand retail FDI", January 11).
With more investments, more jobs and income for the nation is expected, and the 49% on Air India came at the wake of government's decision to disinvestment on the carrier.
A government forecast said growth in Asia's third-largest economy will slow to 6.5 per cent in the financial year 2017 to 2018 against the previous year's 7.1 per cent.
Single-brand retail has been open to 100% FDI since 2011; the main draw for investors will be multi-brand retail-this has been pending due to a fear of retaliation from kirana store owners.More news: Leonardo DiCaprio joins Tarantino's Manson Family film
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Moreover, they have also expressed strong resentment to Union Cabinet's decision to allow foreign investment up to 49% in Air India and other decisions about easing of norms for FDI and FIIs. And to expedite such privatisation move, the government has now made this announcement of permitting 49 per cent FDI.
In the case of medical devices, the government has permitted a wide range of items that can attract up to 100 per cent FDI via the automatic route.
Overseas investment policy has also been liberalised in case of power exchanges, an online platform where electricity is traded. "This should also generate employment and give the Indian consumers access to several global brands", said Pinakiranjan Mishra, partner and national leader, consumer products and retail, EY.
This is the second major liberalisation in FDI policy by the NDA government in one go after major changes effected in June 2016.
Earlier the applications were processed by the Ministry of Home Affairs.