Foreign Direct Investment Part 1


Government approval is required for FDI beyond 74% requiring in the Airports sector and up to 100% FDI is allowed. Domestic Airlines In the domestic Airlines allows FDI up to 49% permitted under automatic route. 100% investment by NRIs permitted under automatic route subject to no direct or indirect equity participation by foreign airlines. The detailed guidelines could be found with the Ministry of Civil Aviation.

Atomic Minerals

The following three activities are permitted to receive FDI/NRI investments:

Mining and mineral separation along with the value addition per sector to the products of integrated activities including mining and mineral separation as mentioned above.

The following FDI participation is permitted:

Up to 74% in pure value addition and integrated projects as well as projects with value addition up to any intermediate is permitted through joint venture companies with Central/ State PS4.s in which equity holding of at least one PSU is not less than 26%. In exceptional cases, FDI beyond 74% will be permitted subject to clearance of the Atomic Energy Commission before FIPB approval.

Agriculture (Including Plantation)

No FDI/NRI investments permitted other than Tea sector, where FOI permitted up to 100% in Tea sector, including tea plantations, with prior Government approval and subject to following conditions:

Compulsory divestment of 26% equity in favor of Indian partner/Indian public within a period of five years, and an approval required in case of any future land use change from the Prior State government.

The above dispensation would be applicable to all fresh investments (FDI) made in this sector.

Broadcasting and TV Software Production allows upto100% foreign investment but is subjected to following clauses mentioned below:

The future laws on broadcasting and no claim of any privilege or protection by virtue of approval accorded, and; not undertaking any broadcasting from Indian soil without Government approval.

Setting up hardware facilities, such as unlinking, HUB, etc. Private companies incorporated in India with permissible FII/NRI/PIO equity within the limits (as in the case of telecom sector FDI limit up to 49% inclusive of both FOI and portfolio investment) to set up unlinking hub (teleports) for leasing or hiring out their facilities to broadcasters. All TV channels irrespective of management control to uplink from India in regards to satellite broadcasting is available provided that they undertake to comply with the broadcast (program & advertising) code.

Under the Cable Television Network Rules (1994) to provide cable TV services, foreign investment is allowed up to 49% (inclusive of both FDI and portfolio investment) of paid up share capital. 51% of paid up share capital must be held by Indian citizens within a company and are eligible

The company with a maximum of foreign equity including FDI/NRI/FII of 49% would be eligible to obtain Direct-to-Home License. The FDI component cannot exceed 20% within the foreign equity. The Terrestrial Broadcasting FM licensee will be a company registered in India under the Companies Act. NRI & PIO investments and portfolio investments has been permitted including FDI or Foreign investment up to 20% equity for FM Radio’s Broadcasting services subject to such terms and conditions as specified from time to time by Ministry of Information and Broadcasting for grant of permission for setting up of FM Radio Stations. No private operator is allowed in terrestrial TV transmission.

Coal & Lignite

Operating power projects as well as coal or lignite mines could be set by Private Indian Companies or pure value addition and integrated projects could amount up to 74% in both the fields. The company shall not do coal mining and shall not sell washed coal or sized coal from its coal processing plants in the open market and shall supply the washed or sized coal to those parties who are supplying raw coal to coal processing plants for washing or sizing and therefore 100% FDI is allowed for setting up coal processing plants.

The coal processing plants allows 100% FDI but subjected to conditions and up to 50% under the automatic route subject to the condition allows FDI in all the above mentioned cases shall not exceed 49% of the equity of a PSU.

Defense & Strategic Industries

Foreign Direct Investment, including NRI investment, is permitted up to 26% with prior Government approval subject to licensing and security requirements

Establishment and operation of Satellite

FDI up to 74% is permitted with prior Government approval

Housing & Real Estate

Interestingly NRIs are allowed to invest in the following activities:

The development of serviced plots and construction of built up residential premises. The Investment in real estate covers construction of residential and commercial premises including business centers and offices. Both roads and bridges include with the development of townships, city and regional level urban infrastructure facilities. FDI is also open to investment in manufacture of building materials along with investment in participatory ventures mentioned in (a) to (e) above. Housing finance institutions and related investment is also open to FDI as an NBFC

Investing Companies in Infrastructure/Service Sector

In respect of the companies in infrastructure/service sector, where there is a prescribed cap for foreign investment, only the direct investment will be considered for the prescribed cap and foreign investment in an investing company will not be set off against this cap provided the foreign direct investment in such investing company does not exceed 49% and the management of the investing company is with the Indian owners. The automatic route is not available


FDI up to 26% in the Insurance sector is allowed on the automatic route subject to obtaining license from Insurance Regulatory & Development Authority (IRDA)

Lottery Business, Gambling & Betting

Government has reiterated prohibition of Foreign Direct Investment (FDI) / Foreign Technical Collaboration (FTC) in any form in lottery business, gambling and betting sector. Foreign Technology Collaboration including Franchise/Trading/brand name, management contract etc. Gambling and betting sector is also prohibited in the lottery business.


The mining of diamonds and precious stones FDI is allowed up to 74% under automatic route. For exploration and mining of gold and silver and minerals other than diamonds and precious stones, metallurgy and processing, allows up to 100% under automatic route. Setting up 100% owned subsidiaries in the mining sector is concerned and subjected to a declaration from the applicant that he has no existing joint venture for the same area and / or the particular mineral.

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