The Centre on Monday announced a series of changes in its Foreign Direct Investment policy, which it claimed makes India “the most open economy in the world for FDI”. A large number of sectors will now be open to 100% FDI as long as the requisite government approvals are in place.
Sectors where 100% FDI will be allowed include the pharmaceuticals industry, civil aviation, animal husbandry, and e-commerce related to food products manufactured in India and broadcast technology such as DTH, cable and mobile television, according to the government's press release.
Significantly, a previous condition that required incoming technology in the defence sector to be “state-of-the-art” has been omitted, in lieu of just "modern" technology.
The government also said that local sourcing norms, which were preventing Apple from opening up retail stores, in India have been officially eased for three years. Apple had sought an exemption from the rule, which required 30% of the parts to be sourced in India. The new policy allows Apple to apply for the exemption as long as it offers "state of the art" or "cutting-edge" technology.
The Centre fended off questions on whether the announcement was meant to keep spirits up after Reserve Bank of India governor Raghuram Rajan’s announcement that he will not return for a second term. This is the second major FDI policy announcement this government has made. The first one was in November 2015.