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Foreign Direct Investment
Foreign Direct Investment
long-lasting interest in enterprises that are operated outside of the economy of the shareholder/ depositor. In FDI,
there is a parent enterprise and a foreign associate, which unites to form a Multinational Corporation (MNC). In order
to be deemed as a FDI, the investment must give the parent enterprise power and control over its foreign affiliate.
Foreign Direct Investment in India is not allowed under the following industrial sectors:
100 per cent FDI is permitted for this sector through the automatic route.
Trading
For trading companies 100 per cent FDI is allowed for
Exports
Bulk Imports
Cash and Carry wholesale trading.
Power
For business activities in power sector like electricity generation, transmission and distribution other than atomic
plants the FDI allowed is up to 100 per cent.
Private Banking
FDI of 49 per cent is allowed in the Banking sector through the automatic route provided the investment adheres to
guidelines issued by RBI.
Insurance Sector
For the Insurance sector FDI allowed is 26 per cent through the automatic route on condition of getting license from
Insurance Regulatory and Development Authority (IRDA).
Telecommunication
For basic, cellular, value added services and mobile personal communications by satellite, FDI is 49 per
cent.
For ISPs with gateways, radio-paging and end to end bandwidth, FDI is allowed up to 74 per cent. But any
FDI above 49 per cent would require government approval.