FDI/FII's
What is FDI?

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Foreign direct investment (FDI) is the acquisition of assets in a country by foreign entities for the purpose of control. FDI is ownership of at least 10% of a business.< xml="true" ns="urn:schemas-microsoft-com:office:office" prefix="o" namespace="">

According to the Ministry of Commerce & Industry, "FDI is freely allowed in all sectors including the services sector, except a few sectors where the existing and notified sectoral policy does not permit FDI beyond a ceiling. FDI for virtually all items/activities can be brought in through the Automatic Route under powers delegated to the Reserve Bank of India (RBI), and for the remaining items/activities through Government approval. Government approvals are accorded on the recommendation of the Foreign Investment Promotion Board (FIPB)."

Currently, foreign companies are only allowed to own 10% of a business in the retail sector. Prime Minister Manmohan Singh is trying to convince his coalition partners to open up FDI along the lines of what is allowed in other industries. FDI limits for other sectors are as follows:

 

SECTOR

LIMIT

BANKING

74 %

NON-BANKING FIN. COMPANIES

100 %

INSURANCE

26 %

TELECOMMUNICATIONS

74 %

PRIVATE PETROL REFINING

100 %

CONSTRUCTION DEVELOPMENT

100 %

COAL & LIGNITE

74 %

TRADING

51 %

ELECTRICITY

100 %

PHARMACEUTICALS

100 %

TRANSPORTATION INFRASTRUCTURE

100 %

TOURISM

100 %

MINING

74 %

ADVERTISING

74 %

AIRPORTS

74 %

FILMS

100 %

DOMESTICS AIRLINES

49 %

MASS TRANSIT

100 %

POLLUTION CONTROL

100 %

PRINT MEDIA (NEWSPAPERS & CURRENT EVENTS)

26 %

PRINT MEDIA (SCIENTIFIC & TECHNICAL PERIODICALS)

100 %