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In a bid to streamline the FDI structure, the government on Thursday introduced a composite foreign investment cap by clubbing all forms of overseas investments to define sectoral limits.
Briefing reporters after the Cabinet meeting, Finance Minister Arun Jaitley said that "from now onwards, all FIIs, NRIs and other foreign investments... will be clubbed.
It will be constituted as a composite cap".
The proposal is aimed at simplification of FDI policy with a view to attracting foreign investments and also improving ease of doing business in India. Under the existing policy, there are different caps for separate investment categories like FDI, FII and NRIs.
The proposal mooted by the Commerce and Industry Ministry would help remove ambiguity on application of sectoral caps, conditions and approval requirements in different sectors and simplify the foreign investment policy, sources said.
The ministry has proposed a composite foreign investment cap (FDI + FPI (FII, QFI) + NRI + FVCI) in sectors, including agriculture, tea, mining, broadcasting, media, airports, retail (single brand and multi-brand), e-commerce, asset reconstruction companies, banking, commodity exchanges and insurance.
In 2014-15, investment by foreign institutional investors (FIIs) grew 717 per cent to $ 40.92 billion.
FDI grew 27 per cent to $30.93 billion in the previous fiscal.