FDI limit in various sectors of the Economy (Consolidated FDI Policy)
The FDI policy regulation is frequently updated by the government by making further and further liberalisation. Here, the following part gives FDI sectoral limits in different sectors as per the Consolidated FDI policy of 2020.
- FDI in civil aviation
Civil Aviation sector includes Airports, Scheduled and Non-Scheduled domestic passenger airlines, helicopter services/Seaplane services, Ground Handling Services, Maintenance and Repair organisations; Flying training institutes; and Technical training institutions.
| FDI limits and regulations the Civil Aviation Sector |
| 1. Civil Aviation subsector/activity | % of equity/FDI Cap | Entry Route |
| (a) Airport – green field projects | 100% | Automatic |
| (b) Existing projects | 100% | Automatic |
| 2. Air transport services | | |
| (a) Scheduled Air Transport Service/ Domestic Scheduled Passenger Airline Regional Air Transport Service | 100% | Automatic up to 49% (up to 100% and automatic for NRls), Government route beyond 49%. |
| (b) Non-Scheduled Air Transport Services | 100% | Automatic |
| (c) Helicopter services/seaplane services requiring DGCA approval | 100% | Automatic |
| 3. Other services under CA | | |
| (a) Ground Handling Services | 100% | Automatic |
| (b) Maintenance and Repair organizations etc | 100% | Automatic |
- FDI Policy in the insurance sector
The insurance sector FDI limit has been made under the automatic route up to 49%. For LIC, the limit proposed is 20% under approval route
| FDI limits and regulations the Insurance Sector |
| 1. Insurance sector/activity | % of equity/FDI Cap | Entry Route |
| Insurance Company | 74% | Automatic |
| Intermediaries or Insurance Intermediaries | 100% | Automatic |
| LIC (proposed) | 20% | Approval |
| The government is planning to change the FDI policy by restricting FDI in LIC to 20% under approval route. |
- FDI Policy in Coal Mining sector
| FDI limits and regulations the Coal Mining Sector |
| 1. Coal and lignite | % of equity/FDI Cap | Entry Route |
| (a) Coal & Lignite mining for captive consumption by sector such as iron & steel and cement units and other eligible activities permitted under the respective Acts. | 100% | Automatic |
| (b) Setting up coal processing plants like washeries | 100% | Automatic |
| (c) Processing infrastructure related to coal and coal mining. | 100% | Automatic |
- Manufacturing
The 2019 amendment of the FDI policy adds contract manufacturing. As per the FDI policy, foreign investment in ‘manufacturing’ sector has been put under automatic route. Here, manufacturing activities may be either (a) self-manufacturing by the investee entity or (b) contract manufacturing in India through a legally tenable contract. Besides, the manufacturer is permitted to sell its products manufactured in India through wholesale and/ or retail, including through e-commerce, without Government approval.
(a) Defence manufacturing
In the case of defence manufacturing, the prevailing policy is to allow FDI upto 49% through automatic route, but as part of the Atmanirbhar Bharat, the government raised this limit to 74%. Defence FDI is subject to other conditions.
| Defence manufacturing | % of equity/FDI Cap | Entry Route |
| Defence industry subject to industrial licensing | 100% | Automatic upto 74%, Government route beyond that wherever it is likely to result in access to modern technology or for other reasons. |
- Broadcasting: Broadcasting contains different subcategories and the sectoral limits are mentioned below.
| 1. Broadcasting Carriage Services | % of equity/FDI Cap | Entry Route |
| Teleports, DTH, Mobile TV, Headend in the Sky Broadcasting Service, Cable Networks | 100% | Automatic |
| 2. Broadcasting content service | | |
| Terrestrial Broadcasting FM (FM Radio), | 49% | Government |
| Up-linking of ‘News & Current Affairs’ TV Channels | 49% | Government |
| Up-linking of Non-‘News & Current Affairs’ TV Channels/ Down-linking of TV Channels | 100% | Automatic |
- Print Media
| Print media | % of equity/FDI Cap | Entry Route |
| Publishing of newspaper and periodicals dealing with news and current affairs | 26% | Government |
| Publication of Indian editions of foreign magazines dealing with news and current affairs | 26% | Government |
- Digital Media
| Sector | % of equity/FDI Cap | Entry Route |
| Uploading/ Streaming of News & Current Affairs through Digital Media | 26% | Government |
- Banking Sector and ARCs
| Category | % of equity/FDI Cap | Entry Route |
| Private Sector Banks | 74% | Automatic up to 49% Government route beyond 49% and up to 74%. |
| Public Sector Banks | 20% | Government |
| Asset Reconstruction Companies | 100% | Automatic |
- Other financial services
| Financial services regulated by regulators | % of equity/FDI Cap | Entry Route |
| Financial Services activities regulated by financial sector regulators, viz., RBI, SEBI, IRDA, PFRDA, NHB or any other financial sector regulator as may be notified by the Government of India. | 100 % | Automatic |
| While label ATMs | 100 % | Automatic |
| Credit information companies | 100 % | Automatic |
| Infrastructure companies in the securities market | 49% | Automatic |
- Pharmaceuticals
| Pharmaceuticals | % of equity/FDI Cap | Entry Route |
| Greenfield | 100% | Automatic |
| Brownfield | 100% | Automatic up to 74% Government route beyond 74% |
- Power exchanges
| Power Exchanges | % of equity/FDI Cap | Entry Route |
| Power Exchanges registered under the CERC Regulations, 2010. | 49% | Automatic |
- Railway infrastructure
| Railway infrastructure | % of equity/FDI Cap | Entry Route |
| Railway infrastructure | 100% | Automatic |
- Pension sector
| Pension sector | % of equity/FDI Cap | Entry Route |
| Pension | 49% | Government |
- Ecommerce activities
Ecommerce entities would engage only in Business to Business (B2B) e-commerce and not in Business to Consumer (B2C) e-commerce. FDI is allowable only in the marketplace model.
| Sector | % of equity/FDI Cap | Entry Route |
| Ecommerce activities | 100% | Automatic |
- Trading
In the case of multi-brand retail trading the existing limits are allowed with conditions.
| Sector | % of equity/FDI Cap | Entry Route |
| Multi-brand retail trading | 51% | Government |
| Single Brand product retail trading | 100% | Automatic up to 49% Government route beyond 49% |
| Cash & Carry Wholesale Trading/Wholesale Trading | 100% | Automatic |
- Telecom sector
| Telecom services | % of equity/FDI Cap | Entry Route |
| All telecom services | 100% | Automatic up to 49%, Government route beyond 49% |
- Plantations and Agriculture
Plantation sector: besides the above, FDI is not allowed in any of the plantation sectors.
| Plantation sector | % of equity/FDI Cap | Entry Route |
| (i)Tea sector including tea plantations (ii) Coffee plantations (iii) Rubber plantations (iv) Cardamom plantations (v) Palm oil tree plantations (vi) Olive oil tree plantations | 100% | Automatic |
| Agriculture and Animal Husbandry | 100% | Automatic |
- Other sectors
| Sector | % of equity/FDI Cap | Entry Route |
| Petroleum and natural gas | 100% | Automatic |
| Industrial Parks | 100% | Automatic |
| Satellites- establishment and operation, subject to the sectoral guidelines of Department of Space/ISRO | 100% | Government |
| Private Security Agencies | 74% | Automatic up to 49% Government route beyond 49% and up to 74% |
| Construction Development: Townships, Housing, Built-up Infrastructure | 100% | Automatic |
Source: Consolidated FDI Policy 2020.
FAQs
Such investment would be subject to the following conditions: (i) It would be made under the Government approval route. (ii) The 49% limit will subsume FDI and FII/FPI investment.
How much FDI is allowed in India in different sectors? ›
FDI limit in various sectors of the Economy (Consolidated FDI Policy)
| Sector | % of equity/FDI Cap | Entry Route |
|---|
| Multi-brand retail trading | 51% | Government |
| Single Brand product retail trading | 100% | Automatic up to 49% Government route beyond 49% |
| Cash & Carry Wholesale Trading/Wholesale Trading | 100% | Automatic |
Mar 13, 2022
In March 2021, the Parliament of India approved a Bill to increase foreign direct investment (FDI) in Indian insurance companies to 74% from the existing cap of 49%.
In which of the following sectors 100% FDI in equity in India is not permitted as per India's FDI policy? ›
In Multi-brand product retail trading, only 51% FDI is allowed. There are two routes in India's FDI they are Automatic Route and Government Route. In single-brand retail trading, 100 percent Foreign Direct Investment (FDI) is allowed. In the wholesale trading, a 100 % FDI is allowed under the automatic route.
In which sector 100 percent FDI is allowed in India? ›
100% FDI is allowed in Chemical sector under automatic route.
Why FDI is increasing in India? ›
According to the Department for Promotion of Industry and Internal Trade (DPIIT), India's cumulative FDI inflow stood at US$ 871.01 billion between April 2000-June 2022; this was mainly due to the government's efforts to improve the ease of doing business and relax FDI norms.
Which sector gets most FDI in India? ›
Computer hardware and software sector in India received the highest share in FDIs amounting to over 14 billion U.S. dollars in fiscal year 2022.
Which sector is the recipient of maximum FDI inflows in India ______________? ›
The correct answer is Services Sector. For economic growth, Foreign Direct Investment (FDI) has been a major non-debt financial resource for the economic development of India.
What percentage of FDI is allowed in tourism sector in India? ›
100% FDI is allowed in tourism construction projects, including the development of hotels, resorts and recreational facilities.
In which sector FDI is not allowed in India? ›
In India, in Rail Transport, Foreign Direct Investment (FDI) is not allowed. In the railway sector FDI is not permitted by the Government of India. Railway sector is completely owned, managed and controlled by the Indian Government. Was this answer helpful?
FDI up to 51%, with prior Government approval, is allowed in retail trade of single brand products, subject to the following conditions: (i) FDI up to 51% would be allowed, with prior Government approval, for retail trade of Single Brand Products; (ii) Products to be sold should be of a 'Single Brand' only.
Which country has the highest FDI in India in 2023? ›
During the first half of this fiscal, Singapore emerged as the top investor. It was followed by Mauritius, the U.A.E., the U.S.A., the Netherlands and Japan.
In which of these sectors was 51% FDI permitted by the Government of India in 2012? ›
| Sector/Activity | % of Equity/ FDI Cap | Entry Route |
|---|
| Multi Brand Retail Trading | 51% | Government |
Jul 10, 2019
Eligible investors can invest in most of the sectors of Indian Economy on an automatic basis. Any Non-resident individual (NRI)/Entity can invest subject to FDI policy (except in prohibited sectors).
Does India allow foreign direct investment? ›
India continues to be an attractive destination for foreign investment, ranking as the world's seventh-largest recipient of FDI in 2021. FDI is regulated primarily by India's Department of Promotion of Industry and International Trade (DPIIT), under its Foreign Exchange Management Act regime (FEMA Regime).
How much is the maximum foreign direct investment FDI allowed in an insurance company in India as per the Insurance Amendment Act 2015? ›
Previous amendment (2015)
Indian insurance industry was liberalized in 2015 to increase FDI limit to 49% from 26%. However, after the initial days of this amendment, the Indian Insurance Companies Rules 2015 prescribed that FDI investment up to 26% under automatic route was allowed.
Why FDI is decreasing In India? ›
Net FDI too declined by nearly 27 per cent to USD 28 billion in 2022-23 as compared with USD 38.6 billion a year ago, mainly due to moderation in gross foreign direct investment inflows and an increase in repatriation, RBI's latest monthly bulletin further added.
What is the impact of FDI in India? ›
IMPACT OF FDI ON ECONOMY
Acquiring foreign direct investment seems to have become a significant component of India's economic growth plans. In developing nations, FDI assures a large quantity of domestic capital, production level, and job prospects, which is a crucial step toward the country's economic progress.
Who are the top 5 FDI investors In India? ›
Top investor countries in India in FY 2023. In FY 2023, Singapore accounted for maximum inward FDI in India at US$17.20 billion, followed by Mauritius (US$6.13 billion), the US (US$6.04 billion), UAE (US$3.35 billion), and the Netherlands (US$2.49 billion).
Which state has highest FDI in India? ›
The combined tally of investment of three years makes Maharashtra the most attractive investment destination, states the survey.
It is to be noted that Maharashtra, Karnataka and Gujarat historically command the lion's share of FDI inflows into the country. These three States alone accounted for 68 per cent of the FDI equity inflows (in dollar terms) into the country between October 2019 and December 2022.
What is the history of FDI in India? ›
Foreign direct investment (FDI) in India was introduced in the 1991 under the Foreign Exchange Management Act (FEMA) implemented by the then finance minister, Dr. Manmohan Singh. It commenced with the baseline of 1 billion dollars in 1990.
Who is the largest investor of FDI in India? ›
Trend on Foreign Direct Investment (FDI) in India. Singapore (27.01%) and USA (17.94%) have emerged as top 2 sourcing nations in FDI equity flows into India in FY2021-22 followed by Mauritius (15.98%), Netherland (7.86%) and Switzerland (7.31%).
What is FDI as percentage of GDP India? ›
India Foreign Direct Investment (FDI) registered a growth equal to 0.9 % of the country's Nominal GDP in Dec 2022, compared with a growth equal to 1.1 % in the previous quarter. India Foreign Direct Investment: % of Nominal GDP data is updated quarterly, available from Jun 2004 to Dec 2022.
What is the FDI in infrastructure in India? ›
FDI equity inflow amount for infrastructure industries India 2016-2022. In financial year 2021, the infrastructure industries in India saw a foreign direct investment equity inflow of approximately 7.9 billion U.S. dollars. This was a strong increase compared to the previous years.
Is FDI is not permitted in insurance sector in India True or false? ›
Parliament on March 22 passed the Insurance Amendment Bill 2021 to increase the foreign direct investment (FDI) limit in the insurance sector to 74% from 49%.
What is India's new FDI policy of 2012? ›
On September 14, 2012, the Government of India (GOI) again approved 51 percent foreign direct investment (FDI) in multi-brand retail. The GOI had approved a similar proposal on November 24, 2011, but suspended the decision on December 7, 2012.
What is FDI Policy 2010 India? ›
4 (i) An FII may invest in the capital of an Indian company either under the FDI Scheme/Policy or the Portfolio Investment Scheme. 10% individual limit and 24% aggregate limit for FII investment would still be applicable even when FIIs invest under the FDI scheme/policy.
What was absolute difference in the FDI to India in between 1996 and 1997? ›
The difference in investments over 1996-1997 was 31.36 - 24.23 = € 7.13 millions. Was this answer helpful?
Who are the 5 largest investors of FDI? ›
10 Countries That Receive the Most Foreign Direct Investment
- U.S.
- U.K.
- China.
- Netherlands.
- Ireland.
- Brazil.
- Singapore.
- Germany.
In FY 2023, India received equity inflows worth US$46.03 billion. The total FDI inflows received in FY 2023, which includes equity inflows, reinvested earnings, and other capital sources, amounted to US$70.97 billion – a decrease from the US$84.83 billion recorded during FY 2022.
What is the FDI of India and economic growth? ›
India has so far received healthy foreign direct investment (FDI) in 2022. As per the latest figures of the government, India has registered its highest-ever total FDI inflows of $84.84 billion in 2021-22. However, the FDI inflow contracted by 14% to $26.9 billion during the April-September period this fiscal.
Which sector is estimated highest with respect to FDI during 2014 2015 in India? ›
Services sectors have attracted the highest Foreign Direct Investment flows into India during 2014-2015.
What is the permissible limit for FDI in retail through unrestricted routes in India? ›
Under this structure the requirement of local sourcing is not applicable to the Indian entity in which FDI is being made by the foreign brand owner. As far as multi brand retail trading is concerned, FDI is limited to 51%, with prior government approval. No automatic route of FDI is available in case of MBRT.
What is the FDI policy in India with special reference to the multi brand retail FDI policy? ›
The FDI Policy permits 51 percent foreign investment in multi-brand retail, subject to approval of the Indian government and fulfilment of certain conditions including the foreign investor needing to bring in a minimum of $100 million; 50 percentof the total foreign investment being invested in backend infrastructure ( ...
What is the FDI inflow In India 2023? ›
In FY 2023, India received equity inflows worth US$46.03 billion. The total FDI inflows received in FY 2023, which includes equity inflows, reinvested earnings, and other capital sources, amounted to US$70.97 billion – a decrease from the US$84.83 billion recorded during FY 2022.
Which country has highest FDI to India? ›
Top investor countries in India in FY 2023. In FY 2023, Singapore accounted for maximum inward FDI in India at US$17.20 billion, followed by Mauritius (US$6.13 billion), the US (US$6.04 billion), UAE (US$3.35 billion), and the Netherlands (US$2.49 billion).
Which state has highest FDI in India 2023? ›
The combined tally of investment of three years makes Maharashtra the most attractive investment destination, states the survey. The investment is more than Karnataka ( ₹2,93,149 crore, 331 projects) and Gujarat ( ₹ 2,36,866 crore, 602 projects), states the survey.
Why FDI is decreasing in India? ›
Net FDI too declined by nearly 27 per cent to USD 28 billion in 2022-23 as compared with USD 38.6 billion a year ago, mainly due to moderation in gross foreign direct investment inflows and an increase in repatriation, RBI's latest monthly bulletin further added.
Who is the biggest investor in India? ›
Often referred to as the 'Big Bull', Rakesh Jhunjhunwala was one of the most popular and successful investors in the Indian stock market. Before entering the financial markets, Rakesh Jhunjhunwala qualified as a Chartered Accountant.
