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Breaking: Indian govt allows 100 per cent FDI in defense and Civil Aviation Sector

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Govt allows 100 per cent FDI in Civil Aviation Sector
As per the present FDI policy, foreign investment up to 49% is allowed under automatic route in Scheduled Air Transport Service/ Domestic Scheduled Passenger Airline and regional Air Transport Service.
BY: EXPRESS WEB DESK | NEW DELHI |PUBLISHED ON:JUNE 20, 2016 2:30 PM
The government on Monday allowed 100 % FDI in aviation sector under automatic route in Greenfield Projects and 74% FDI in Brownfield Projects under automatic route.

As per the present FDI policy, foreign investment up to 49% is allowed under automatic route in Scheduled Air Transport Service/ Domestic Scheduled Passenger Airline and regional Air Transport Service. It has now been decided to raise this limit to 100%, with FDI up to 49% permitted under automatic route and FDI beyond 49% through Government approval.

Related
However, foreign airlines would continue to be allowed to invest in capital of Indian companies operating scheduled and non-scheduled air-transport services up to the limit of 49% of their paid up capital and subject to the laid down conditions in the existing policy.

With a view to aid in modernization of the existing airports to establish a high standard and help ease the pressure on the existing airports, it has been decided to permit 100% FDI under automatic route in Brownfield Airport projects
http://indianexpress.com/article/bu...ws-100-per-cent-fdi-in-civil-aviation-sector/
Some channel are reporting 100 percent FDI in defence sector too.
 
Modi goverment allows 100% FDI in defence via govt approval route; does away with access to ‘state-of-art’ technology condition
By: FE Online | Published: June 20, 2016 2:34 PM
modi-reuters-1.jpg
Foreign investment beyond 49% has now been permitted through government approval route, in cases resulting in access to modern technology in the country or for other reasons to be recorded. (Reuters Photo)

With an aim to boost job creation in the economy, PM Narendra Modi-led NDA government allowed 100% FDI (Foreign Direct Investment) in defence through government approval route.

A PMO release said, “Foreign investment beyond 49% has now been permitted through government approval route, in cases resulting in access to modern technology in the country or for other reasons to be recorded. The condition of access to ‘state-of-art’ technology in the country has been done away with.”

“FDI limit for defence sector has also been made applicable to Manufacturing of Small Arms and Ammunitions covered under Arms Act 1959,” the release added.

The earlier FDI regime permitted 49% FDI participation in the equity of a company under automatic route. FDI above 49% was permitted through Government approval on case to case basis, wherever it is likely to result in access to modern and ‘state-of-art’ technology in the country.

Last year, the government relaxed FDI norms in the defence sector by allowing FDI up to 49 per cent under automatic route and beyond that through the FIPB’s approval.

Although the government had liberalised the FDI cap in the sector, but no major overseas investment has been received in the segment so far.
http://www.financialexpress.com/art...-to-state-of-art-technology-condition/290757/

The move would also help boost the domestic industry which imports up to 70 per cent of its military hardware

@Abingdonboy @PARIKRAMA @SrNair @GURU DUTT @randomradio @arp2041 @MilSpec @Water Car Engineer
 
Here are the sectors that are getting 100 per cent FDI now:

Food Products manufactured/produced in India: 100% FDI under government approval route for trading, including through e-commerce, in respect of food products manufactured or produced in India.

Defence Sector: With the new changes in policy, foreign investment beyond 49 per cent has now been permitted through government approval route, in cases resulting in access to modern technology in the country or for other reasons to be recorded. The condition of access to ‘state-of-art’ technology in the country has been done away with. The FDI limit for defence sector has also been made applicable to Manufacturing of Small Arms and Ammunitions covered under Arms Act 1959.
.
Broadcasting Carriage Services: Teleports (setting up of up-linking HUBs/Teleports); Direct to Home (DTH); Cable Networks (Multi System operators (MSOs) operating at National or State or District level and undertaking upgradation of networks towards digitalisation and addressability); Mobile TV; Headend-in-the Sky Broadcasting Service (HITS) have all been opened up to 100 per cent FDI. For infusion of fresh foreign investment in cable betworks beyond 49% in a company not seeking license/permission from sectoral Ministry, resulting in change in the ownership pattern or transfer of stake by existing investor to new foreign investor, FIPB approval will be needed.

Pharmaceutical: The government has cleared 100 per cent FDI under automatic route in greenfield pharma and FDI up to 100% under government approval in brownfield pharma. With the objective of promoting the development of this sector, it has been decided to permit up to 74 per cent FDI under automatic route in brownfield pharmaceuticals and government approval route beyond 74 per cent will continue.

Civil Aviation Sector: The extant FDI policy on Airports permits 100 per cent FDI under automatic route in Greenfield Projects and 74 per cent FDI in Brownfield Projects under automatic route. FDI beyond 74 per cent for Brownfield Projects is under government route. It has been decided to permit 100% FDI under automatic route in Brownfield Airport projects. For Scheduled Air Transport Service/ Domestic Scheduled Passenger Airline and regional Air Transport Services, it has now been decided to raise the limit to 100 per cent with FDI up to 49 per cent permitted under automatic route and FDI beyond 49 per cent through Government approval. For NRIs, 100% FDI will continue to be allowed under automatic route. However, foreign airlines would continue to be allowed to invest in capital of Indian companies operating scheduled and non-scheduled air-transport services up to the limit of 49% of their paid up capital and subject to the laid down conditions in the existing policy.

Animal Husbandry: FDI in Animal Husbandry (including breeding of dogs), Pisciculture, Aquaculture and Apiculture was allowed 100% under Automatic Route under controlled conditions. It has been decided to do away with this requirement of ‘controlled conditions’ for FDI in these activities.

http://indianexpress.com/article/in...e-sectors-that-can-now-have-full-fdi-2864533/
 
PARIKRAMA said:
Here are the sectors that are getting 100 per cent FDI now:

Food Products manufactured/produced in India: 100% FDI under government approval route for trading, including through e-commerce, in respect of food products manufactured or produced in India.

Defence Sector: With the new changes in policy, foreign investment beyond 49 per cent has now been permitted through government approval route, in cases resulting in access to modern technology in the country or for other reasons to be recorded. The condition of access to ‘state-of-art’ technology in the country has been done away with. The FDI limit for defence sector has also been made applicable to Manufacturing of Small Arms and Ammunitions covered under Arms Act 1959.
.
Broadcasting Carriage Services: Teleports (setting up of up-linking HUBs/Teleports); Direct to Home (DTH); Cable Networks (Multi System operators (MSOs) operating at National or State or District level and undertaking upgradation of networks towards digitalisation and addressability); Mobile TV; Headend-in-the Sky Broadcasting Service (HITS) have all been opened up to 100 per cent FDI. For infusion of fresh foreign investment in cable betworks beyond 49% in a company not seeking license/permission from sectoral Ministry, resulting in change in the ownership pattern or transfer of stake by existing investor to new foreign investor, FIPB approval will be needed.

Pharmaceutical: The government has cleared 100 per cent FDI under automatic route in greenfield pharma and FDI up to 100% under government approval in brownfield pharma. With the objective of promoting the development of this sector, it has been decided to permit up to 74 per cent FDI under automatic route in brownfield pharmaceuticals and government approval route beyond 74 per cent will continue.

Civil Aviation Sector: The extant FDI policy on Airports permits 100 per cent FDI under automatic route in Greenfield Projects and 74 per cent FDI in Brownfield Projects under automatic route. FDI beyond 74 per cent for Brownfield Projects is under government route. It has been decided to permit 100% FDI under automatic route in Brownfield Airport projects. For Scheduled Air Transport Service/ Domestic Scheduled Passenger Airline and regional Air Transport Services, it has now been decided to raise the limit to 100 per cent with FDI up to 49 per cent permitted under automatic route and FDI beyond 49 per cent through Government approval. For NRIs, 100% FDI will continue to be allowed under automatic route. However, foreign airlines would continue to be allowed to invest in capital of Indian companies operating scheduled and non-scheduled air-transport services up to the limit of 49% of their paid up capital and subject to the laid down conditions in the existing policy.

Animal Husbandry: FDI in Animal Husbandry (including breeding of dogs), Pisciculture, Aquaculture and Apiculture was allowed 100% under Automatic Route under controlled conditions. It has been decided to do away with this requirement of ‘controlled conditions’ for FDI in these activities.

http://indianexpress.com/article/in...e-sectors-that-can-now-have-full-fdi-2864533/
Click to expand...

Just curious, do Semi-conductor industries also have 100% FDI
 
Perpendicular said:
How will it change ongoing made in India fighter jet efforts.
Click to expand...
It doesn't change much really EXCEPT, in theory, this means that there is no longer the requirement for a foreign OEM to tie up with an Indian partner and could instead set up 100% owned subsidiaries in India and thus there would be very very little skill or technology transfer to India.

This would seem to fall right into Boeing's hands as they were not willing to partner with an Indian company to produce the F-18 in India.*

However, if the MoD/GoI were to green light such a offer (for fighters) they would be incredibly foolish and short sighted as well as being incredibly disingenuous.


IMHO this move is not aimed at the fighter market at all but ground and naval systems that have been crying out for 100% FDI for a while now.


To be noted, 100% will only be sanctioned for the highest of tech, you can't bring 1970s tech to India and expect to be awarded 100% FDI.


* @randomradio permission for 100% FDI for Boeing would effectively undermine what you have been saying all along- that the GoI is trying to set up 2 rival INDIAN companies to HAL capable of producing fighters in India. A 100% Boeing subsidiary would be next to useless other than employing a few thousand people, once the fighter order is complete they would scale down and leave India. There would be no "rival" created and no Indian entity would benefit from "know how" gained.


@PARIKRAMA
 
Last edited:
Syama Ayas said:
Just curious, do Semi-conductor industries also have 100% FDI
Click to expand...
The Government of India has allowed 100 per cent Foreign Direct Investment (FDI) under the automatic route in Electronics Systems Design & Manufacturing sector. According to the data released by the Department of Industrial Policy and Promotion (DIPP), the electronics sector attracted foreign direct investment (FDI) worth US$ 1.53 billion between April 2000 and September 2015.

Some of the notable developments in this sector are as follows:

  • Infineon Technologies, a German semiconductor firm has partnered with National Skill Development Corporation (NSDC) to impart training to youth on semiconductor or chip technology, aimed at boosting the electronic manufacturing ecosystem in India.
  • US-based semiconductor company Freescale which has R&D facility in India, said that it is enabling its partners to bring smart products to facilitate the government's Rs 1.13 trillion (US$ 16.95 billion) Digital India initiative.
  • Cyient Ltd has announced that it is acquiring a majority stake in Rangsons Electronics Pvt. Ltd, a Mysuru-based electronics system design and manufacturing (ESDM) services company. Cyient has signed an agreement to acquire a 74 per cent equity stake in Rangsons Electronics in an all-cash transaction.
  • Aricent, a US-based product engineering firm has acquired Bengaluru-based chip design services company SmartPlay for Rs 1,100 crore (US$ 170 million), making it one of the biggest acquisitions in the semiconductor space in India
  • Altran Technologies SA, a French technology consulting firm, has agreed to acquire SiConTech, a Bengaluru-based company that designs semiconductor chips, making it the first deal in the semiconductor space wherein a foreign multinational corporation has acquired an Indian start-up.
  • Invecas Technologies Pvt. Ltd, a startup working on outsourced chip design plans to invest US$15-20 million over the next couple of years in setting up design centers in Hyderabad and Bengaluru.
  • IESA has signed a MoU with Singapore Semiconductor Industry Association (SSIA) to establish and develop trade and technical cooperation between the electronics and semiconductor industries of both the countries.
  • India Electronics & Semiconductor Association (IESA), the premier trade body representing the Indian Electronic System Design and Manufacturing (ESDM) industry has announced a SPEED UP and SCALE UP of its talent development initiative. This will be implemented through the Centre of Excellence with Electronics Sector Skills Council of India (ESSCI) and a Memorandum of Understanding (MoU) with Visvesvaraya Technological University (VTU) and RV-VLSI Design Center to build the talent pipeline in the ESDM space.
  • Gujarat is expected to have its first semiconductor wafer fabrication manufacturing facility by late 2017 in Prantij of Sabarkantha district. The facility, which will be set up by Hindustan Semiconductor Manufacturing Corporation (HSMC), will employ over 25,000 people including 4,000 direct employees. HSMC along with ST Microelectronics (France/Italy) and Silterra (Malaysia) will set up two manufacturing units each with capacity of producing 20,000 wafers per month.
http://www.ibef.org/industry/semiconductors.aspx

Abingdonboy said:
It doesn't change much really EXCEPT, in theory, this means that there is no longer the requirement for a foreign OEM to tie up with an Indian partner and could instead set up 100% owned subsidiaries in India and thus there would be very very little skill or technology transfer to India.

This would seem to fall right into Boeing's hands as they were not willing to partner with an Indian company to produce the F-18 in India.*

However, if the MoD/GoI were to green light such a offer (for fighters) they would be incredibly foolish and short sighted as well as being incredibly disingenuous.


IMHO this move is not aimed at the fighter market at all but ground and naval systems that have been crying out for 100% FDI for a while now.


To be noted, 100% will only be sanctioned for the highest of tech, you can't bring 1970s tech to India and expect to be awarded 100% FDI.


* @randomradio permission for 100% FDI for Boeing would effectively undermine what you have been saying all along- that the GoI is trying to set up 2 rival INDIAN companies to HAL capable of producing fighters in India. A 100% Boeing subsidiary would be next to useless other than employing a few thousand people, once the fighter order is complete they would scale down and leave India. There would be no "rival" created and no Indian entity would benefit from "know how" gained.


@PARIKRAMA
Click to expand...

The problem is my good friend Boeing reluctance of less than 100% and going solo is in line with what will cut ice with the Senate when it comes to "transfer of sensitive technology" for a "emerging non NATO strategic partner".

Behind the sugar coated words of Boeing or Saab, it's apparent in reality that no one will share substantial technology unless you pay a premium price.

Everything else is a pure marketing gimmick to satisfy oneself.

Well on topic, I see the first major beneficiary being DCNS.. They will bring their AIP and other technologies to India via that route.

Of course some of that tech is what will go to SSN project and is part of Rafale deal
 
PARIKRAMA said:
The problem is my good friend Boeing reluctance of less than 100% and going solo is in line with what will cut ice with the Senate when it comes to "transfer of sensitive technology" for a "emerging non NATO strategic partner".

Behind the sugar coated words of Boeing or Saab, it's apparent in reality that no one will share substantial technology unless you pay a premium price.

Everything else is a pure marketing gimmick to satisfy oneself.

Well on topic, I see the first major beneficiary being DCNS.. They will bring their AIP and other technologies to India via that route.

Of course some of that tech is what will go to SSN project and is part of Rafale deal
Click to expand...
Exactly brother, the Boeing/LM/SAAB offers just do not fit with India's ambitions despite what their marketing departments may say. India isn't interested in any offers unless it can secure full ToT in critical tech such as propulsion and sensors
And this tech isn't even on the table for India (see the pathetic progress of DTTI).

What I meant to say was, many will use this information to push a certain narrative (as you've already posted on the Rafale sticky some already have) visa a vis the fighter deal(s) but IMO, when weighing all of the information we know nothing has really changed here. The offers other than the Rafale are all incompatible with India's demands.
 
Abingdonboy said:
It doesn't change much really EXCEPT, in theory, this means that there is no longer the requirement for a foreign OEM to tie up with an Indian partner and could instead set up 100% owned subsidiaries in India and thus there would be very very little skill or technology transfer to India.

This would seem to fall right into Boeing's hands as they were not willing to partner with an Indian company to produce the F-18 in India.*

However, if the MoD/GoI were to green light such a offer (for fighters) they would be incredibly foolish and short sighted as well as being incredibly disingenuous.


IMHO this move is not aimed at the fighter market at all but ground and naval systems that have been crying out for 100% FDI for a while now.


To be noted, 100% will only be sanctioned for the highest of tech, you can't bring 1970s tech to India and expect to be awarded 100% FDI.


* @randomradio permission for 100% FDI for Boeing would effectively undermine what you have been saying all along- that the GoI is trying to set up 2 rival INDIAN companies to HAL capable of producing fighters in India. A 100% Boeing subsidiary would be next to useless other than employing a few thousand people, once the fighter order is complete they would scale down and leave India. There would be no "rival" created and no Indian entity would benefit from "know how" gained.


@PARIKRAMA
Click to expand...
100% FDI was there since 2013, anything over 49% has to be "state of the art" to be considered for government approval
NOW it's "modern tech" to get approval.

https://twitter.com/x/status/744853543492845570

https://twitter.com/x/status/744853816994992128
 

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