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Annex-A:
List of Activities for which RBI Automatic Route for FDI is not allowed
3. All activities/ sectors would require prior government approval for FDI in
the following circumstances:
i. Where provisions of Press Note 1 (2005 series) are attracted.
ii. Where more than 24% foreign equity is proposed to be inducted for
manufacture of items reserved for Small Scale Sector.
4. In sectors/ activities listed below, FDI is permitted up to 100% on the
automatic route subject to applicable sectoral rules/ regulations.
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5. Sector-specific policy for FDI : In the sectors/ activities, FDI up to the limit
indicated in Annex-B is allowed subject to other conditions as specified.
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Annex-B: FDI Regime in India
2. Mining
2.1 coal/lignite mines for captive 100% Automatic
consumption by power projects,
iron and steel, cement production
and other eligible activities
permitted under the Coal Mines
Nationalization Act 1973
2.2 Coal processing plant 100% Automatic
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4. Power Cap on Foreign Equity Approval by
Electricity generation, 100% Automatic
transmission and distribution
5. Atomic Energy
5.1 Mining and mineral Up to 74% and FDI beyond FIPB
separation, value addition and 74% subject to clearance by
integrated projects the Atomic Energy
Commission
5.2 Others Prohibited n.a.
6. Manufacturing
6.1 Small scale industries 24% and beyond 24% is FIPB
subject to a mandatory export
obligation of at least 50% of
annual products.
6.2 Drugs/ pharmaceuticals (except 100% for bulk products, their Automatic.
for activities acquiring compulsory intermediaries and Exceptions
and drugs produced with the use of formulations require
recombinant DNA technology and compulsory
specific cell / tissue targeted licensing.
formulations).
6.3 Telecommunications equipment 100% Automatic
6.4 Pollution control equipment 100% Automatic.
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Sectors Cap on foreign equity Approval
process
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(both for satellite and submarine 26% equity to Indian firms 49% otherwise
cables), infra-structure providers within five years, and FIPB on case by
providing dark fibre (IP category I), licensing by the DOT and case basis
electronic mail and voice mail security requirements
8.4 Postal and courier services 100% in courier services FIPB
excluding distribution of
letters
8.5 Broadcasting Up to 49% in uplinking hub FIPB
or teleport facilities for
leasing or hiring out facilities.
Up to 20% in DTH
broadcasting service.
8.6 Information technology 100% Automatic
9. Transport
9.1 Airlines Up to 40% with no direct/ FIPB
indirect equity participation
by foreign airlines, 100%
investment allowed for NRIs
and OCBs
9.2 Airports 100% Automatic up to
74% otherwise
FIPB
Sectors Cap on foreign equity Approval
process
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premises).
10.3 Townships and resorts 100% Automatic
10.4 Print media 100% for some activities FIPB
Selected References
Das, Tarun (1993) Macro-economic Framework, Export Promotion Zones and Foreign
Investment in India, Ad-Hoc Working Group on Investment and Financial Flows, pp.1-
75, TD/B/WG.1/Misc.3/ Add.3, UNCTAD, Geneva.
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Das, Tarun (1996) Policies and Strategies for Promoting Private Sector’s Role in
Industrial and Technological Development Including Privatisation in the Asian
Economies, pp.1-171, ST/ESCAP/1696, United Nations, New York.
Das, Tarun (1997) Foreign Investment- Technology Transfer- and Growth Nexus
Towards Greater Regionalisation And Complementation of Manufacturing Production
and Technology Upgrading, pp.1-158, ESCAP, United Nations, Bangkok.
Das, Tarun (2003a) Economic Reforms in India- Rationale, Scope, Progress and
Unfinished Agenda, Pune, India: Bank of Maharashtra.
Das, Tarun (2003b) An Assessment of Trade in Services- A Case Study for India, Indian
Council for Research on International Economic Relations (ICRIER), New Delhi.
Das, Tarun (2004) Financing International Co-operation- A Case Study for India,
UNDP, New York.
Das, Tarun, Rajaram Dasgupta, Rohit Parmer and Ashis Saha, (2003) Preparation of
An Index of Services Production, National Institute for Bank Management, Pune.
Kumar, Nagesh (2001) Globalisation and Quality of Foreign Direct Investment, London
and New York: Routledge.
Rashmi Banga (2004) Impact of government policies and investment agreements on FDI
inflows, ICRIER, Delhi.
World Bank (2004) World Development Report- Making Services Work for Poor
People, Oxford University Press.