Cabinet approves 100% FDI in single brand retail, construction development

Existing rules allow foreign airlines to own as much as 49% in an Indian airline with the exception of Air India

Existing rules allow foreign airlines to own as much as 49% in an Indian airline with the exception of Air India

In a statement here, CAIT, said "100 per cent FDI in single brand retail through the automatic route will facilitate easy entry of MNCs in the retail trade and also violate the poll promise of the BJP".

The Union Cabinet on Wednesday approved 100 percent foreign investment in single brand retail trading (SBRT) and construction development.

Foreign airlines were so far barred from owning any share in Air India, even though they were allowed to have up to 49 percent stake in other Indian airline companies.

Making the announcement, Sinha said the Air India stake sale would most likely be an offering for an integrated airline through the bidding process "and both domestic and worldwide operations will be divested as one entity".

Once the country's monopoly airline, Air India has slowly lost market share to new low-priced private players in one of the world's fastest-growing airline markets.

This condition was relaxed subject to certain conditions.

"Having taken the decision to privatise Air India, the Modi government is now moving towards handing over Air India to a foreign airline".

"This measure indicates that the Modi government is moving towards allowing FDI in multi-brand retail trade", it added.

It has been decided by Union Cabinet to clarify that real-estate broking service does not amount to real estate business and is, therefore, eligible for 100% FDI under the automatic route.

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It has now been made a decision to do away with this provision, thereby allowing FIIs/FPIs to invest in Power Exchanges through primary market as well, the government said.

The approval through automatic route is aimed at further quickening the FDI clearance process and many foreign players may now enter the Indian market this advantage of this.

Under the present policy, FII and FPI purchases were restricted to secondary market only.

The government said the goal was to help the country attract larger FDI inflows that is expected to contribute to growth of investment, income and employment in the country. A special goal vehicle (SPV) will be formed, in which all the real estate and artefacts belonging to the airline will be housed, according to a ministry official.

During the year 2014-15, total FDI inflows received were USA $ 45.15 billion as against U.S. $ 36.05 billion in 2013-14.

India received a record total FDI of $60.08 billion in 2016-17.

In the financial year 2016-17, total FDI of United States $ 60.08 billion has been received, which is an all-time high, read the statement issued by the government.

"Cases under the government approval route, also requiring security clearance with respect to countries of concern, will continue to be processed by concerned administrative department or ministry".

Accordingly, the Government has chose to introduce a number of amendments in the FDI Policy.

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