FDI Revolution: 100% FDI In Single Brand Allowed; Major Reforms in Real Estate, Aviation Announced!

2018 shall be remembered as a historical year, because starting today, single brand retail has been allowed 100% FDI via automatic route.

Besides, several crucial amendments and announcements has been made in the sectors of real estate and civil aviation, which will collectively enable more FDI across various sectors.

These announcements has been made right after PM Modi returned from Davos, Switzerland after attending World Economic Forum event.

100% FDI For Single Brand Retail Allowed!

Earlier, 49% FDI was allowed under automatic route for single brand retail, which means that investors can invest up to 49% in any single brand retail, without any prior approval.

For investments beyond 49%, special regulatory permissions were required from the concerned Govt. departments.

But now, any investor can infuse 100% FDI directly and automatically, without any Govt. authority.

Besides, Govt. has also amended the rule for sourcing 30% of all raw materials from India – Now, incremental sourcing of goods has been allowed for a period of 5 years, after which 30% sourcing of raw materials can be done.

100% FDI in single brand retail is expected to attract major investors from all over the world, and allow them to set up their shops easily.

However, the issue of 100% FDI in big ticket multi-brand retail is still an ongoing issue, which needs some attention now.

FDI  in Real Estate, Civil Aviation Relaxed

Meanwhile, FDI in real estate and aviation industries has also been relaxed.

To start with, foreign investors are now allowed to invest in Air India up to 49%; earlier, Air India was exempted from any FDI due to security reasons. For private airlines as well, 49% FDI was already approved.

A Govt. official said, “Foreign investment(s) in Air India including that of foreign Airline(s) shall not exceed 49% either directly or indirectly. Substantial ownership and effective control of Air India shall continue to be vested in Indian National,”

In real estate, a big announcement has been made: Govt has decided that brokerage service doesn’t amount to real estate business, and this means, that FDI would be now allowed. Thus, we can expect some foreign investors backing real estate brokerage firms now, thereby inciting new growth in the sector.

Besides, 49% FDI has now been allowed directly for power exchanges as well.

You can find details of the new FDI announcements made right here.