The Union government on Wednesday allowed overseas investors to make 100 per cent FDI (foreign direct investment) in single-brand retail trading and construction development without any government approval.
It also approved changes in FDI norms to allow foreign airlines to own 49 per cent in Air India under the approval route. However, two conditions have been set: The foreign investment, including that of foreign Airline (s), shall not exceed 49 per cent either directly or indirectly and “substantial ownership and effective control of Air India shall continue to be vested in Indian National,” an official statement said.
The decisions were taken at a Cabinet meeting, chaired by Prime Minister Narendra Modi in New Delhi, the statement said.
The decisions would help provide ease of doing business and also lead to larger FDI inflows contributing to growth of investment, income and employment, it said.
Real estate broking service does not amount to real estate business and is, therefore, eligible for 100 per cent FDI under the automatic route.
Investment in power exchanges
The Cabinet also decided to allow FIIs/FPIs to invest in power exchanges through primary market as well.
So far 49 per cent FDI was permitted under automatic route in power exchanges registered under the the Central Electricity Regulatory Commission (Power Market) Regulations, 2010. However, FII/FPI purchases were restricted to secondary market only.
