India: Revised Foreign Direct Investment Policy Of India

The Government of India has bought out revised Foreign Direct Investment (FDI) Policy. Set out below is a snapshot of the recent liberalizations brought in the FDI Policy governing different sectors in India.

The policy prescribes the foreign investment caps in specified industrial sectors; these caps are subject to applicable laws/regulations; security and other conditionalities.

FDI policy broadly categorizes industrial sectors as:

  • Unrestricted
  • Restricted
  • Prohibited


Up to 100% foreign ownership
Agriculture & Animal Husbandry
  1. Floriculture, Horticulture, and Cultivation of Vegetables & Mushrooms under controlled conditions;
  2. Development and Production of seeds and planting material;
  3. Animal Husbandry (including breeding of dogs), Pisciculture, Aquaculture, Apiculture and
  4. Services related to agro and allied sectors.
Note: Besides the above, FDI is not allowed in any other agricultural sector/activity.
Automatic route
Plantation Sector
  1. Tea sector including tea plantations
  2. Coffee plantations
  3. Rubber plantations
  4. Cardamom plantations
  5. Palm oil tree plantations
  6. Olive oil tree plantations
Note: Besides the above, FDI is not allowed in any other plantation sector/activity.
Automatic route
Construction Development: Townships, Housing, Built-up Infrastructure

Construction-development projects (which would include development of townships, construction of residential/commercial premises, roads or bridges, hotels, resorts, hospitals, educational institutions, recreational facilities, city and regional level infrastructure, townships)
Automatic route
Railway Infrastructure

Construction, operation and maintenance of the following:
  1. Suburban corridor projects through PPP,
  2. High speed train projects,
  3. Dedicated freight lines,
  4. Rolling stock including train sets, and locomotives/coaches manufacturing and maintenance facilities,
  5. Railway Electrification,
  6. Signaling systems,
  7. Freight terminals,
  8. Passenger terminals,
  9. Infrastructure in industrial park pertaining to railway line/sidings including electrified railway lines and connectivities to main railway line and
  10. Mass Rapid Transport Systems
Automatic route
Non-Banking Finance Companies (NBFC)

Foreign investment in NBFC is allowed under the automatic route in only the following activities:
  1. Merchant Banking
  2. Under Writing
  3. Portfolio Management Services
  4. Investment Advisory Services
  5. Financial Consultancy
  6. Stock Broking
  7. Asset Management
  8. Venture Capital
  9. Custodian Services
  10. Factoring
  11. Credit Rating Agencies
  12. Leasing & Finance
  13. Housing Finance
  14. Forex Broking
  15. Credit Card Business
  16. Money Changing Business
  17. Micro Credit
  18. Rural Credit
Automatic route
Manufacturing Automatic route
E-commerce (Permitted in marketplace model and not the inventory based model. Also, it applies only to Business to Business e-commerce and not Business to Consumer e-commerce) Automatic route
Asset Reconstruction Company Automatic route
Credit Information Companies Automatic route
Civil Aviation (Ground Handling Services subject to sectoral regulations and security clearance) Automatic route
Civil Aviation (Maintenance and Repair organizations; flying training institutes; and technical training institutions) Automatic route
Air Transport Services ( Non-Scheduled and Helicopter services/seaplane services requiring DGCA approval) Automatic route
Airports (Greenfield and Brownfield) Automatic route
Pharmaceuticals ( Greenfield) Automatic route
White Label ATM Operations Automatic route
Trading (Cash & Carry Wholesale Trading/Wholesale Trading (including sourcing from MSEs) Automatic route
Industrial Parks (Greenfield and Brownfield) Automatic route
Broadcasting Carriage Services Automatic route
Mining (Except mining and mineral separation of titanium bearing minerals and ores, its value addition and integrated activities) Automatic route
Mining (Mining and mineral separation of titanium bearing minerals and ores, its value addition and integrated activities) Government route
Satellites (Establishment and operation, subject to the sectoral guidelines of Department of Space/ISRO) Government route


Up to 20% foreign ownership
Banking- Public Sector (Subject to Banking Companies (Acquisition & Transfer of Undertakings) Acts 1970/80)

This ceiling (20%) is also applicable to the State Bank of India and its associate Banks.
Government route
Up to 26% foreign ownership
Print Media (Publishing of newspaper and periodicals dealing with news and current affairs and publication of Indian editions of foreign magazines dealing with news and current affairs) Government route
Up to 49% foreign ownership
Defence Industry subject to Industrial License under the Industries (Development & Regulation) Act, 1951; and manufacturing of small arms and ammunition under the Arms Act, 1959.
  • Automatic route up to 49%
  • Government route beyond 49% and upto 100% wherever it is likely to result in access to modern technology or for other reasons to be recorded
Broadcasting Content Services

Terrestrial Broadcasting FM(FM Radio) and Up-linking of 'News & Current Affairs' TV Channels
Government route
Petroleum and Natural Gas (Petroleum refining by the Public Cabinet Committee Sector Undertakings (PSU), without any disinvestment or dilution of domestic equity in the existing PSUs.) Government route
Scheduled Air Transport Service/ Domestic Scheduled Passenger Airline and Regional Air Transport Service
  • Automatic route upto 49%
  • Government route beyond 49% and upto 100%
  • Automatic route up to 100% for NRIs
Insurance Automatic route
Telecom Services

(Including Telecom Infrastructure Providers Category-I) All telecom services including Telecom Infrastructure Providers Category-I, viz. Basic, Cellular, United Access Services, Unified License (Access Services), Unified License, National/International Long Distance, Commercial V-Sat, Public Mobile Radio Trunked Services
  • Automatic route up to 49%
  • Government route beyond 49% and up to 100%.
Single Brand product retail trading

Products to be sold should be of a "Single Brand" only
  • Automatic route up to 49%
  • Government route beyond 49% up to 100%
Pension Sector Automatic route
Power Exchanges

(Power Exchanges registered under the Central Electricity Regulatory Commission (Power Market) Regulations, 2010)
Automatic route
Infrastructure Company in the Securities Market

(namely, stock exchanges, commodity exchanges, depositories and clearing corporations, in compliance with SEBI Regulations)
Automatic route
Up to 74% foreign ownership
Banking- Private Sector
  • Automatic route up to 49%
  • Government route beyond 49% and up to 74%
Private Security Agencies
  • Automatic route up to 49%
  • Government route beyond 49% and up to 74%
Pharmaceuticals (Brownfield)
  • Automatic route up to 74%
  • Government route beyond 74% up to 100%


  • Lottery Business including Government/private lottery, online lotteries etc.
  • Gambling and Betting including casinos etc.
  • Chit funds (Informal savings scheme practiced in India which accepts interest and lends money)
  • Nidhi company ( Type of Mutual Benefit Fund Companies)
  • Trading in Transferable Development Rights (TDRs)
  • Real Estate Business or Construction of Farm Houses
  • Manufacturing of cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes
  • Activities/sectors not open to private sector investment are Atomic Energy and Railway operations

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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