The Union Cabinet on Wednesday rolled out major FDI reforms, including the nod for 100 percent foreign direct investment (FDI) in single-brand retail via automatic route. The Modi cabinet also eased FDI rules for the aviation and the construction sectors.
Currently, FDI up to 49 percent is permitted under automatic route in single brand retail. Beyond that cap, government approval is required. The new move is aimed at attracting more foreign investment.
The Cabinet allowed overseas investors to invest 100 per cent FDI (foreign direct investment) in single brand retail trading and construction development without any government approval, PTI reported quoting an official statement. Foreign airlines will now be able to invest up to 49 percent under approval route in Air India, the statement said.
The government also gave the green signal for FPIs and FIIs to invest in power exchanges through primary market. The relaxation policy is to liberalise and simplify the FDI policy to provide ease of doing business in the country. The changes in FDI policy are brought in to create an investor-friendly climate to foreign players and in turn attract more investment to boost economic growth and generate jobs.
Prior to the move, aviation stocks including that of Jet Airways, SpiceJet, Interglobe Aviation gained in the stock market.