By IANS
New Delhi : The Indian government Wednesday allowed larger overseas investments in key sectors that include civil aviation and petroleum.
Foreign direct investment norms have also been further liberalised for credit information firms and commodity exchanges.
A meeting of the Cabinet Committee on Economic Affairs, presided over by Prime Minister Manmohan Singh, raised the limits as part of a liberalisation of the country’s foreign investment policy, an official statement said.
In a bid to give a major boost to its aviation sector, especially in the cargo and non-scheduled passenger operations, the foreign equity limit in these two categories was raised to 74 percent, from 49 percent at present.
“Foreign direct investment of up to 74 percent may be permitted on the automatic route for non-scheduled airlines, chartered airlines and cargo airlines,” said an official statement after a meeting of the central cabinet of ministers here.
“No direct or indirect participation by foreign airlines would be allowed in the non-scheduled airlines and chartered airlines. Non-resident Indian investment will be allowed up to 100 percent on the automatic route,” the statement added.
In petroleum, the limit has been increased from 26 percent to 49 percent, with prior approval of the Foreign Investment Promotion Board, for foreign firms that intend to invest in state-run refineries.
It has also been decided to delete the condition on foreign firms to divest up to 26 percent equity in favour of an Indian partner or the public within five years of actual trading or marketing of petroleum products.
Similarly, up to 26 percent foreign direct investment and 23 percent by foreign funds has now been permitted in commodity exchanges with a caveat that no single investor holds more than five percent.
In credit information companies, up to 49 percent foreign equity is now allowed subject to prior approval of the government and industry regulator.
In titanium mining, up to 100 percent equity, with prior government approval, is now permitted if value addition facilities are set up within India, along with the transfer of technology.