FDI Policy for Industrial Parks, Commodity Exchanges, Air Transport, Petroleum & Natural Gas etc notified

NEW DELHI. FDI Policy for Credit Information Companies ,Industrial Parks, Commodity Exchanges, Air Transport Services, Petroleum & Natural Gas, Mining of Titanium Bearing Minerals & Others  has been notified and further liberalized by the Government of India as under:

Policy for Foreign Investment in Credit Information Companies

Foreign Direct Investment under the FDI Scheme incorporated as Schedule 1 under regulation 5 (1) of the Foreign Exchange Management (Transfer or Issue of Security By a Person Resident Outside India) Regulations, 2000 (FEMA Regulations) + investment by registered Foreign Institutional Investors (FII) under the Portfolio Investment Scheme incorporated as Schedule 2 under Regulation 5(2) of the FEMA Regulations, is allowed up to 49% with prior approval of the Government and regulatory clearance from RBI.

Investment by a registered FII under the Portfolio Investment Scheme would be permitted up to 24% only in the CICs listed at the Stock Exchanges, within the overall limit of 49% for foreign investment.

Such FII investment would be permitted subject to the conditions that:

(a)  No single entity should directly or indirectly hold more than 10% equity.

(b)  Any acquisition in excess of 1% will have to be reported to RBI as a reporting requirement; and

(c) FIIs investing in CICs shall not seek a representation on the Board of  Directors based upon their shareholding.

Policy for foreign investment in Commodity Exchanges

Foreign investment will be allowed through a composite ceiling i.e. Foreign Direct Investment (FDI) under the FDI Scheme incorporated as Schedule 1 under regulation 5 (1) of the Foreign Exchange Management (Transfer or Issue of Security By a Person Resident Outside India) Regulations, 2000 (FEMA Regulations) + investment by registered Foreign Institutional Investors (FII) under the Portfolio Investment Scheme incorporated as Schedule 2 under Regulation 5(2) of the FEMA Regulations, is allowed up to 49%.

 FDI will be allowed with specific prior approval of the Government .

 Investment by registered FII under the Portfolio Investment Scheme will be limited to 23% and investment under the FDI Scheme will be limited to 26%.

FII purchases shall be restricted to secondary market only.

No foreign investor/ entity, including persons acting in concert, will hold more than 5% of the equity in these companies.

FDI in Industrial Parks

FDI up to 100% under the automatic route would be allowed both in setting up and in established industrial parks and would not be subject to the conditionalities spelt out in Press Note 2(2005) provided the Industrial Parks meet with the under-mentioned conditions:

( i )  it would comprise of a minimum of 10 units and no single unit shall occupy more than 50% of the allocable area;

( ii )  the minimum percentage of the area to be allocated for industrial activity shall not be less than 66% of the total allocable area.

FDI ceilings in Air Transport Services:

(a) Scheduled Air Transport Service/ Domestic Scheduled Passenger Airline – FDI up to 49% and investment by Non-resident Indians (NRI) up to 100% allowed on the automatic route.

(b) Non-Scheduled Air Transport Service/ Non-Scheduled airlines, Chartered airlines, and Cargo airlines- FDI up to 74% and investment by Non-resident Indians (NRI) up to 100% allowed on the automatic route.

(c) Helicopter services/seaplane services requiring DGCA approval- FDI up to 100% allowed on the automatic route.

3.4 FDI ceilings in other services under Civil Aviation sector

(a) Ground Handling Services- FDI up to 74% and investment by Non-resident Indians (NRI) up to 100% allowed on the automatic route. This will be subject to sectoral regulations and security clearance.

(b) Maintenance and Repair organizations; flying training institutes; and technical training institutions – FDI up to 100% allowed on the automatic route.

FDI in Petroleum & Natural Gas sector

The present policy on FDI in the Petroleum & Natural Gas sector permits FDI up to 100% under the automatic route in exploration, petroleum product marketing, petroleum product pipelines, Natural Gas/LNG pipelines, and Petroleum refining in the private sector.  FDI up to 26% is permitted with prior Government approval in petroleum refining by the Public Sector Undertakings (PSU). In the case of actual trading and marketing of petroleum products, FDI is allowed up to 100% with the condition that 26% foreign equity would be divested in favour of Indian partner/public within 5 years.

On a review of the policy for the Petroleum & Natural Gas sector, it has been decided to –

i)         delete the condition of compulsory divestment of up to 26% equity within  5 years for actual trading and marketing of petroleum products; and

ii)        allow FDI up to 49%, with prior approval of FIPB, in petroleum refining by PSUs without involving any divestment of dilution of domestic equity in the  existing PSUs.

FDI Policy for Mining of Titanium Bearing Minerals & Others

On a review of the policy on FDI, Government decided as under:

FDI up to 100% will be allowed with prior Government approval in mining and mineral separation of titanium bearing minerals & ores, its value addition and integrated activities subject to sectoral regulations and the Mines and Minerals (Development and Regulation Act 1957).

FDI for separation of titanium bearing minerals & ores will be subject to the following additional conditions viz.:

( i )  value addition facilities are set up within India along with  transfer of technology;

( ii )  disposal of tailings during the mineral separation shall be carried out in accordance with disposal of tailings during the mineral separation shall be carried out in accordance with regulations framed by the Atomic Energy Regulatory Board such as Atomic Energy (Radiation Protection) Rules, 2004 and the Atomic Energy (Safe Disposal of Radioactive Wastes) Rules, 1987.

FDI will not be allowed in mining of “prescribed substances” listed in the Government of India Notification No. S.O. 61(E) dated 18.1.2006 issued by the Department of Atomic Energy.

(Source: Allindiantaxes)

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