FDI Limit in Various Sectors

FDI Limit in Various Sectors

FDI up to 100% is allowed on the automatic route in most sectors/activities, subject to applicable laws/ regulations; security and other conditionalities. FDI is prohibited in Lottery Business including Government/private lottery, online lotteries, etc.; Gambling and betting including casinos etc.; chit funds; Nidhi company; trading in Transferable Development Rights(TDRs); Real Estate Business or Construction of Farm Houses; Manufacturing of Cigars, cheroots, Cigarillos and cigarettes, of tobacco or of tobacco substitutes; activities/sectors not open to private sector investment e.g. Atomic Energy and Railway Transport (other than Mass Rapid Transport Systems). FDI, in various sectors, is allowed, up to the different limits, varying from 20% to 100%, subject to applicable laws/ regulations; security and other conditionalities. The detailed information is available in ‘Consolidated FDI Policy Circular 2014’ at this Department’s website. As regards proposal to increase the cap in some sectors, including reasons therefor, Finance Minister, in his Budget Speech, given on 10.7.2014, has made following statement: “The policy of the NDA Government is to promote Foreign Direct Investment (FDI) selectively in sectors where it helps the larger interest of the Indian Economy. FDI in several sectors is an additionality of resource which helps in promoting domestic manufacture and job creation. India today needs a boost for job creation. Our manufacturing sector in particular needs a push for job creation. India today is the largest buyer of Defence equipment in the world. Our domestic manufacturing capacities are still at a nascent stage. We are buying substantial part of our Defence requirements directly from foreign players. Companies controlled by foreign governments and foreign private sector are supplying our Defence requirements to us at a considerable outflow of foreign exchange. Currently we permit 26 per cent FDI in Defence manufacturing. The composite cap of foreign exchange is being raised to 49 per cent with full Indian management and control through the FIPB route. The Insurance sector is investment starved. Several segments of the Insurance sector need an expansion. The composite cap in the Insurance sector is proposed to be increased up to 49 per cent from the current level of 26 per cent, with full Indian management and control, through the FIPB route. To encourage development of Smart Cities, which will also provide habitation for the neo-middle class, requirement of the built up area and capital conditions for FDI is being reduced from 50,000 square metres to 20,000 square metres and from USD 10 million to USD 5 million respectively with a three year post completion lock in. To further encourage this, projects which commit at least 30 per cent of the total project cost for low cost affordable housing will be exempted from minimum built up area and capitalisation requirements, with the condition of three year lock-in. FDI in the manufacturing sector is today on the automatic route. The manufacturing units will be allowed to sell its products through retail including E-commerce platforms without any additional approval.” The information was given by the Minister of State (Independent Charge) of the Ministry of Commerce & Industry Smt. Nirmala Sitharaman in a written reply in Rajya Sabha today.

Trade Deficit with China

Trade Deficit with China

The details of import-export and trade deficit with China during the last three years are given below:- Value in USD Million Year Import Export Total Trade Trade Deficit I II III IV V 2011-12 55,313.58 18,076.55 73,390.13 (-)37,237.03 2012-13 52,248.33 13,534.88 65,783.21 (-)38,713.45 2013-14 51,049.01 14,829.31 65,878.32 (-)36,219.70 (Source; DGCI&S) Given the strength of China’s Manufacturing sector Chinese export to India relies strongly on manufactured items addressing the demand of fast expanding sectors like telecom and power in India along with other low priced products. Subsides provided by Chinese Government to their manufacturing sectors contribute towards the low input costs of Chinese manufactured products. The comparatively less developed manufacturing sector in India and greater reliance on primary products in our trade basket is proving to be an impediment. The limited market access afforded to Indian products in China is also a contributing factor to the growing trade deficit. With a view to reducing trade deficit with China, efforts are being made to diversify the trade basket with emphasis on manufactured goods. The Government is also pursuing market access issues to tackle non-tariff barriers in the Chinese market at different fora. At the Ministerial level, there is a India-China Joint Group on Economic Relations, Trade Science and Technology (JEG) where trade related issues are taken up regularly. The next meeting of the 10th JEG is scheduled to be held in China in this year. Also, Indian exporters are encouraged to participate in major trade fairs in China to show-case Indian products in the Chinese market and increase engagement with Chinese companies. Participation of Indian exporters in trade fairs educates the Chinese importers about niche Indian products. Business to Business relations are encouraged through schemes such as Market Access Initiative (MAI)/Market Development Assistance (MDA). Trade deficit can be reduced to sustainable levels through more exports from India to China as well as by China’s investing in building manufacturing capacities in India. In 2013, three MoUs were signed on products such as bovine meat, fishery products, pharma and an agreement was signed on feed and feed ingredients. During the recent visit to China in June, 2014, an MoU on Industrial parks has been signed. These measures are expected to boost exports and reduce trade deficit to some extent. The information was given by the Minister of State (Independent Charge) of the Ministry of Commerce & Industry Smt. Nirmala Sitharaman in a written reply in Rajya Sabha today

Steps Taken to Boost Exports

Steps Taken to Boost Exports

The Government has taken note that in 2012-13, the export had decreased and import had increased in comparison to 2011-12. However in 2013-14 and in the current months of this financial year, the exports have shown an increasing trend.  Exports, adversely affected by global financial crisis and economic slowdown, are slowly indicating signs of revival.  The trade details are given below:                                                                                                                              Year Exports Imports 2011-12 306.0 489.3 2012-13 300.4 490.7 2013-14 313.5 450.6 2013-14 (April-June,2013) 73.3 121.6 2014-15 (April-June,2014) (P) 80.1 113.2 (Value in US$ Billion) Source: DGCI&S, Kolkata                                       (P): Provisional In order to boost exports and enable this sector to bear the brunt of global economic slowdown, Government has taken  a number of measures, which,  inter alia,  include the following:                                             i.            Two percent Interest Subvention Scheme,  which was available for certain export sectors viz. Handicrafts, Carpet, Handlooms, SMEs, Readymade Garments, Processed Agriculture Products and Toys, was  widened to include 134 tariff lines of Engineering Sector w.e.f 1st January, 2013.                                          ii.            Government enhanced the rate of Interest Subvention from 2% to 3 % with effect from 1.8.2013.                                         iii.            As part of product diversification and market diversification strategy, 47 new items were added to Market Linked Focus Product Scheme (MLFPS) and 122 new items were added to the Focus Product Scheme (FPS). Government also notified 153 hi-tech products on 10.7.2013 under Focus Product Scheme making them eligible for duty script at the rate of 2 %.                                         iv.            Apart from above, various other measures were also taken to increase exports as part of the Annual Supplement to the Foreign Trade Policy (2009-14) announced on 18.4.2013. As a result exports of Engineering Goods, Textiles, Chemicals, Handicrafts, Carpets, Readymade garments have increased in 2013-14 as compared to 2012-13. The information was given by the Minister of State (Independent Charge) of the Ministry of Commerce & Industry Smt. Nirmala Sitharaman in a written reply in Rajya Sabha today. ******