Breaking news

Meghalaya Governor Satya Pal Malik’s stand has not softened even after moreAll You Need to Know About Cryptocurrency in India: Trends, Legality and more The Champaran Foundation, in collaboration with InFeed, organised an online more In one of the biggest leaks ever of offshore financial records, the more The Champaran Foundation, in collaboration with InFeed, is inviting entries more The recently concluded German elections on September 26, 2021 have given a more According to latest news reports, China has been on a defense infrastructure more A new line of argument has already come to dominate the public sphere: it’ more The government has gone one step further to detect community spread of the more The government has issued an order to abolish the six allowances, including more Aarogya Setu application launched by NIC is aimed to track COVID-19 affected more SEOUL| South Korea’s unemployment rate was unchanged in April as the more Amid the outbreak of Corona pandemic in the country, Indian government has more Prime Minister Narendra Modi in his address to the nation on Tuesday indicated more Corona infection in the country is taking a macabre form. So far, more than 74 more Congress General Secretary Priyanka Gandhi Vadra has written a letter to UP more On Tuesday, Prime Minister Narendra Modi announced a package of Rs 20 lakh more

Union Cabinet will consider relaxing FDI norms in single brand retail and Digital Media

The Union Cabinet today will consider relaxing foreign direct investment (FDI) norms in several sectors, including single-brand retail and digital media, to attract overseas players, sources said.

Other sectors where FDI rules would be eased are coal mining and contract manufacturing.

The government may approve proposal to allow 100 per cent FDI in contract manufacturing, they said.

In the existing foreign investment policy, 100 per cent foreign direct investment is permitted in the manufacturing sector under the automatic route.

A manufacturer is also allowed to sell products manufactured in India through wholesale and retail channels, including through e-commerce, without the government’s approval.

But, the policy does not talk about the contract manufacturing and it is not clearly defined in the policy.

“Big technology firms across the world are going for this, so there is a need for clarification on the matter,” the sources said.

Commenting on the proposal, L Badri Narayanan, Partner, Lakshmikumaran & Sridharan Attorneys, said that the move if approved would give an impetus to the manufacturing sector, which is riddled with grey areas.

“If the manufacturing entity is proposed to be allowed to have foreign investment, the same appears to be in line with the principles already set out in the FDI policy,” Narayanan said.

Similarly, the government is looking at coming out with a clarification on applicability of the foreign direct investment policy on the digital media sector.

The present FDI policy is silent on the fast-growing digital media segment.

In the print media sector, 26 per cent FDI is allowed through government approval route. Similarly, 49 per cent is permitted in broadcasting content services through government approval route.

In the single-brand retail sector, the Cabinet will consider a proposal of relaxing rules for complying with the mandatory 30 per cent local sourcing norms by foreign single-brand retailers.

As per the proposal, single-brand retail firms would also be permitted to open online stores before setting up brick-and-mortar shops.

Currently, online sale by a single-brand retail player is allowed only after the opening of physical outlets.

Relaxations are expected in a provision where foreign retail traders are presently allowed to adjust procurement of goods from India for their global operations for meeting the mandatory local sourcing requirement.

However, “incremental” sourcing of goods from India is only taken into account presently, and is allowed only for five years.

“Amendments and easing are also likely in this provision,” a source said adding, foreign single brand retailers may be allowed to adjust all of their procurement of goods from India for their global operations for meeting the local sourcing norms.

In the coal mining sector, according to the proposal, foreign players would be allowed to mine coal and sell it.

Currently, FDI is permitted for captive coal mining only.

The move comes in the backdrop of announcements made by the government in the Budget.

Finance Minister Nirmala Sitharaman in her Budget speech in July had said that the government would examine suggestions of further opening up of FDI in aviation, media (animation, AVGC) and insurance sectors in consultation with all stakeholders to attract more overseas investment.

FDI in India dipped 1 per cent to $44.36 billion in 2018-19.

Last year, the government had relaxed FDI rules for several sectors, including single-brand retail, non-banking financial companies and construction.

Foreign investments are considered crucial for India, which needs billions of dollars for overhauling its infrastructure sector such as ports, airports and highways to boost growth.

FDI helps in improving the country’s balance of payments situation and strengthen the rupee value against other global currencies, especially the US dollar.

Tags: , , ,

Story Page