1.

49%

2.

100%

(a) Activities covered – Merchant Banking; Under Writing; Portfolio Management Services; Investment Advisory Services; Financial Consultancy; Stock-broking; Asset Management; Venture Capital; Custodial Services; Factoring; Credit Reference Agencies; Leasing & Finance; Housing Finance; Forex-broking; Credit Card Business; Money-changing Business; Micro-credit; Rural credit.

(b) Minimum Capitalisation norms for fund based (NBFCs) – (i) For FDI upto 51%, US $ 0.5 million to be brought in upfront; (ii) If the FDI is above 51% and upto 75%, US $ 5 million to be brought upfront; (iii) If the FDI is above 75% and upto 100%, US $ 50 million out of which $ 7.5 million to be brought in upfront and the balance in 24 months.

(c) Minimum Capitalisation norms for non-fund based activities – Minimum Capitalisation norm of US $ 0.5 million is applicable in respect of non-fund based NBFCs with foreign in¬vestment.

(d) Foreign investors can set up 100% operating subsidi¬aries without the condition to disinvest a minimum of 25% of its equity to Indian entities, subject to bringing in US $ 50 million as at (b) (iii) above (without any restriction on number of oper¬ating subsidiaries without bringing in additional capital).

(e) Joint Venture Operating NBFCs that have 75% or less than 75% foreign investment will also be allowed to set up sub¬sidiaries for undertaking other NBFC activities, subject to the subsidiaries also complying with the applicable minimum capital inflow i.e., (b)(i) and (b)(ii) above.

(f) FDI in the NBFC sector is put on automatic route subject to compliance with guidelines of the Reserve Bank of India. RBI would issue appropriate guidelines in this regard.

3.

26%

4.

49%

(ii) ISPs with gateways, radio paging and end-to-end bandwidth, FDI is permitted upto 74% with FDI, beyond 49% requiring Government approval. These services would be subject to licensing and security requirements.

(iii) No equity cap is applicable to manufacturing activities

(iv) FDI upto 100% is allowed for the following activities in the telecom sector – (a) ISPs not providing gateways (both for satellite and submarine cables); (b) Infrastructure providers providing dark fibre (IP Category I); (c) Electronic Mail, and (d) Voice Mail.

The above would be subject to the following conditions –

(a) FDI upto 100% is allowed subject to the condition that such companies would divest 26% of their equity in favour of Indian public in 5 years, if these companies are listed in other parts of the world.

(b) The above services would be subject to licensing and security requirements, wherever required.

(c) Proposal for FDI beyond 49% shall be considered by FIPB on case to case basis.

5.

100%

100%

100%

(a) exploration of oil, and

(b) the discovered fields of national oil companies

100%

6.

100%

7.

***

(ii) 100% FDI is allowed for setting up coal processing plants 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 plants for washing or sizing.

(iii) FDI upto 74% is allowed for exploration or mining of coal or lignite for captive consumption.

(iv) In all the above cases, FDI is allowed upto 50% under the automatic route subject to the condition that such investment shall not exceed 49% of the equity of a PSU.

8.

9.

***

However, under the FIPB route –

(i) 100% FDI is permitted in case of trading companies for the following activities :

(a) exports; (b) bulk imports with export/expanded warehouse sales; (c) cash and carry wholesale trading; (d) other import of goods or services provided at least 75% is for procurement and sale of the same group and not for third party use or onward transfer/distribution/sales.

(ii) The following kinds of trading are also permitted, subject to provisions of Exim Policy – (a) Companies for providing after-sales services (that is not trading per se);

(b) Domestic trading of products of JVs is permitted at the wholesale level for such trading companies who wish to market manufactured products on behalf of their joint ventures in which they have equity participation in India;

(c) Trading of hi-tech items/items requiring specialised after-sales service;

(d) Trading of items for social sector;

(e) Trading of hi-tech, medical and diagnostic items;

(f) Trading of items sourced from the small scale sector under which, based on technology provided and laid down quality specifications, a company can market that item under its brand name;

(g) Domestic sourcing of products for exports;

(h) Test marketing of such items for which a company has approval for manufacture provided such test marketing facility will be for a period of two years, and investment in setting up manufacturing facilities commence simultaneously with test mar¬keting;

(i) FDI upto 100% permitted for e-commerce activities subject to the condition that such companies would divest 26% of their equity in favour of the Indian public in five years, if these companies are listed in other parts of the world. Such companies would engage only in business to business (B2B) e-commerce and not in retail trading.

10.

100%

11.

100%

12.

100%

13.

100%

For foreign technology agreements, automatic approval is granted if –

(i) Upto 3% of the capital cost of the project is proposed to be paid for technical and consultancy services including fees for architects design, supervision, etc.;

(ii) Upto 3% of the net turnover is payable for franchising and marketing/publicity support fee, and

(iii) Upto 10% of gross operating profit is payable for management fee, including incentive fee.

14.

74%

100%

(ii) For exploration and mining of gold and silver and minerals other than diamonds and precious stones, metallurgy and processing FDI is allowed upto 100% under automat¬ic route,

(iii) Press Note 18 (1998 series) dated 14-12-1998 would not be applicable for setting up 100% owned subsidiaries in so far as the mining sector is concerned, subject to a declaration from the applicant that he has no existing joint venture for the same area and/or the particular mineral.

15.

100%

16

100%

FDI upto 100% allowed on the automatic route with no entry-level condition.

17.

74%

18.

100%

19.

100%

20.

100%

(i) Arms and ammunition, explosives and allied items of defence equipments, defence aircrafts and warships;

(ii) Atomic substances, Narcotics and Psychotropic Sub¬stances and Hazardous Chemicals;

(iii) Distillation and brewing of Alcoholic drinks, and

(iv) Cigarette/cigars and manufactured tobacco substitutes.

21.

100%

22.

100% for NRIs 49% for others

23

100%

(a) Minimum area to be developed under each project shall be as under –

(i) In case of development of serviced housing plots—10 hectares

(ii) In case of construction development project—50,000 sq. mtrs.

(iii) In case of combination project, any one of the above two conditions.

(b) The investment shall be subject to the following conditions –

(i) Minimum capitalization of US $ 10 million for wholly owned subsidiaries and US $ 5 million for joint ventures with Indian partners. The funds would have to be brought in within six months of commencement of business of the company.

(ii) Original investment cannot be repatriated before a period of three years from completion of minimum capitalization. However, the investor may be permitted to exit earlier with prior approval of the Government through the FIPB.

(c) At least 50% of the project must be developed within a period of five years from the date of obtaining all statutory clearances. The investor shall not be permitted to sell undeveloped plots.

(d) The project shall conform to the norms and stand¬ards, as laid down in the applicable building control regulations, bye-laws, rules, and other regulations of the State Gov¬ernment/Municipal/Local Body concerned.

(e) The investor shall be responsible for obtaining all necessary approvals, including those of the building/layout plans, developing internal and peripheral areas and other infra¬structure facilities, payment of development, external develop¬ment and other charges and complying with all other requirements as prescribed under applicable rules/bye-laws/regulations of the State Government/Municipal/Local Body concerned.

(f) The State Government/Municipal/Local Body con¬cerned, which approves the building/development plans, shall monitor compliance of the above conditions by the developer.

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