The government has launched a new wave of FDI reforms allowing a 100 percent inflows from the sectors of civil aviation and food processing, while on the other hand easing the norms for defense and pharmaceuticals.

The PMO office has said that the decisions will make, “India as the country of the most open economy in the world of FDI”, but critics have a different view, they have said that the decision was a panic reaction to Rajan’s decision to exit RBI and further return to academia after September 4.

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Moreover, the first batch of the FDI reforms will be announced by the government in November 2015.

Government approves 100% FDI in Civil, Aviation, Defense, Food and Pharma sector

Key Highlights:

The Modi government has allowed 100 percent in the aviation policy of scheduled carriers. Also Under the automatic route 49 percent FDI has been permitted. However, at present up to 49 percent FDI is permitted in the scheduled airlines. Further, for the NRIs, 100 percent FDI will continue to be allowed under automatic route.
100 percent FDI has also been approved for the broadcasting carriage services such as the cable networks, mobile TV and DTH and the food product-e-commerce.
The Foreign investment in the green field pharma projects has also been approved 100 percent and in case of brownfield projects its 74 percent.
For defense sector its 100 percent FDI.
The government has also further relaxed the sourcing norms for up to five years for the single-brand retail trading.

These relaxation of the FDI norms will help the foreign defense companies substantially.

Entry of Apple:

With the relaxation of FDI norms and the relaxed sourcing regime for another five years for entities undertaking the Single Brand Retail Trading of products having a ‘state-of-art’ and ‘cutting edge’ technology, the company Apple can take a sigh of relief and can also plan an easy entry into the Indian markets.

FDI norms relaxed: What does this exactly means?