Airlines and some defence industries will now be allowed to be 100 per cent foreign owned while the current requirement that products sold by overseas retail operators must be 30 per cent locally sourced, is to be scrapped – a move whichApple is likely to take advantage of almost immediately.
Investment rules in pharmaceuticals and food production are also being relaxed in a government initiative that is being seen as the clearest indication yet that India is getting increasingly serious about attracting FDI.
In a statement, the government said the relaxation of foreign ownership rules was intended to provide a “major impetus to employment and job creation in India… with these changes, India is now the most open economy in the world for FDI“.
The changes mean that India will allow foreign funds and portfolio investors to fully own local airlines. At present, overseas ownership is capped at 49 per cent. However, Prime Minister Narendra Modi’s government decided to keep the restrictions on foreign airlines’ stake in local operators at 49 per cent.