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Govt allows FDI in all sectors

Josy Joseph in New Delhi

The Union cabinet on Tuesday decided to completely free foreign direct investment in all sectors barring a negative list. The cabinet also decided to permit the construction of a new international airport at Bangalore with strategic private partnership.

Union minister Pramod Mahajan told reporters after the meeting that the government decision was an attempt to keep its FDI policy transparent and liberal. Now onwards the FDI will be through an automatic route, except in six categories.

Automatic FDI will not be allowed in areas where an industrial licence is required. Those foreign investors who already have a joint venture in India will also not be provided the facility. The new facility will be denied to foreign investors for acquiring of shares in an existing company.

Proposals falling outside notified sectoral policy will also not enjoy the facility, Mahajan said. He added that automatic FDI will not be allowed in small-scale units where foreign investment is above 24 per cent.

Among the other major decisions taken by the Union government today was the construction of a new international airport in Banglore with private participation. According to Mahajan, the new airport, which will replace the existing one, will have strategic partnership from private investors. The need for a new airport was felt due to the growing traffic into the Silicon Valley of India, he said.

Karnataka State Industrial Development Corporation and Airports Authority of India will make 26 per cent of the investment, and the rest will be from private groups, he said.

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