The current FDI norms impose a ceiling of 24 per cent FDI
for companies in the SSI sector i.e. small scale units having
capital investment in plant and machinery not exceeding Rs.
50,000,000 (USD 1,250,000). Further, SSI units with foreign
investment exceeding the notified sectoral cap are liable to
lose their status as SSI units.
With a view to liberalizing the SSI sector and augmenting
economic activity in the country, it is announced that FDI
norms governing SSIs would be relaxed and a notification is
likely to be tabled before Parliament, enabling an increase in
the limits of FDI in the SSI sector.
If such notification is passed, SSI units would be eligible
to raise foreign equity in accordance with caps governing the
sectors in which they operate, thereby improving their access
to technology and capital and assisting in the growth and
modernization of the sector.
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