In a bid to correct a declining economy, the Government of India gave the go ahead for 100% investment in Telecom sector from foreign companies. The government has also set higher limits for the Defence technology investments. Foreign Direct Investment (FDI) is now total for Telecom and 49% in civil aviation. FDI cap for defense is 26%, while FDI cap for the insurance sector rose to 40% from the previous 26%.
Multi-brand retail, airports, brownfield pharma and Media see no changes in the FDI limits. Under the automatic route, only single brand retail will have an FDI cap of 49%. The changes in the FDI limits was determined after Prime Minister Manmohan Singh had a meeting with his key ministers.
The Marayam Committe made suggestions to raise investment limits for 20 sectors, of which only 12 got the approval. Telecom sector had the best news so far, with doors for FDI wide open.
(AW: Sruthi)
