The Union Cabinet has approved a proposal to allow 100 percent Foreign Direct Investment (“FDI”) through automatic route in single brand retail. Currently, FDI up to 49 per cent is permitted under automatic route in single brand retail but beyond that limit, government’s approval is required. This move will envisage a more investor friendly environment to foreign players and will further boost and attract more FDI to boost economic growth.
After opening of 100 per cent FDI in single brand retail in 2014 (through government’s approval), many global players have already entered the Indian market. The approval through automatic route will further quicken the FDI clearance process and many foreign players may now enter the Indian market due to less clearance process.
It is also expected that the government will ease the FDI norms in the aviation and the construction sectors. A formal notification in this regard is expected today.