New Delhi: In a fresh round of FDI reforms, the government Wednesday allowed 100 per cent foreign investment in coal mining and contract manufacturing, eased sourcing norms for single-brand retailers and approved 26 per cent overseas investment in digital media as it looks to boost economic growth from a five-year low.
Coming within a week of Finance Minister Nirmala Sitharaman unveiling a raft of measures to boost growth, the Union Cabinet headed by Prime Minister Narendra Modi liberalised foreign direct investment (FDI) rules in the four sectors.
“The changes in FDI policy will result in making India a more attractive FDI destination, leading to benefits of increased investments, employment, and growth,” Commerce Minister Piyush Goyal told reporters after the meeting of the Union Cabinet.
In the coal sector, now foreign players can invest 100 per cent for mining and sale of coal under automatic route. They will also be able to carry out other associated processing infrastructure related to the sector such as coal washery, crushing, coal handling, and separation (magnetic and non-magnetic).
As per the present FDI policy, 100 per cent overseas investments under automatic route was allowed for coal and lignite mining for captive consumption by power projects, iron and steel and cement units only.
“Further, 100 per cent FDI under automatic route is also permitted for setting up coal processing plants like washeries subject to the condition that 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 units for washing or sizing,” an official statement said.
But, the decision is subject to provisions of Coal Mines Act, 2015 and the Mines and Minerals (development and regulation) Act, 1957. The government also clarified that 100 per cent FDI is permitted for contract manufacturing.
In the current policy, 100 per cent FDI is allowed under automatic route in manufacturing sector.
Further, the government permitted 26 per cent overseas investments through government approval route for uploading/ streaming of news and current affairs through digital media, on the lines of print media. The present FDI policy is silent on the digital media segment. In the print media, 26 per cent FDI is allowed through government approvals. Similarly, 49 per cent is permitted in broadcasting content services through government approval route.