Broadcast industry: 74 per cent FDI allowed
In a major decision to liberalise the broadcast industry, the Cabinet Committee on Economic Affairs (CCEA) decided to raise Foreign Direct Investment(FDI) cap to 74 per cent in various services of the sector.This does not include the TV news channels and FM radio where the cap of 26 per cent will apply.
The decision apply to broadcast carriage services providers, including Direct-to-Home, Head-end in the Sky (HITS), Multi-Service Operators (MSOs) and cable TV to bring about uniformity.
HITS is a satellite multiplex service that provides TV channels for cable operations.
74 per cent FDI was allowed in Mobile TV, which is a segment likely to see future growth.
Commerce Minister Anand Sharma explained, out of the 74 per cent, 49 per cent will be through automatic route while the rest will be allowed through government route, ie Foreign Investment Promotion Board (FIPB) clearance.
However, for sensitive segments like TV news channels, current affairs, FM radio and content providers, the FDI limit will not be changed from current 26 per cent.
Airlines industry: 49 p.c stake allowed for foreign airlines
Foreign airlines can now pick up 49 per cent stake in India’s domestic carriers, a step that is expected to give a boost to cash-strapped aviation industry.
The Cabinet Committee on Economic Affairs on Friday approved the proposal which would pave way for equity infusion into India’s airlines that are passing through acute turbulence as most of them are in dire need of funds for operations.
“Though FDI of upto 49 per cent, 75 per cent and 100 per cent was there in aviation sector, foreign airlines were not allowed,” Civil Aviation Minister Ajit Singh told reporters after the meeting.
Current FDI norms allow foreign investors, not related to airline business, to directly or indirectly own an equity stake of up to 49 per cent in Indian carrier.
Allowing foreign airlines to pick up stakes in Indian carriers has been a long-pending demand of the aviation sector.
Most of the Indian carriers are suffering losses because of high taxes on jet fuel, rising airport fees, costlier loans, poor infrastructure and cut-throat competition.
Except IndiGo, all airlines have posted losses in the financial year ending on March 31.
Multi-brand Retail: 51p.c FDI allowed
Cabinet decided to allow 51 per cent FDI in multi-brand retail but left it to the state governments, the final authority in setting up of such stores. The approval should be obtained from Foreign Investment Promotion Board (FIPB). The minimum investment is pegged at $100 million, 50 per cent of which should be invested in “back-end infrastructure”. Also, 30 per cent of the products must be procured from small-scale industries.
This will enable much-awaited entry of foreign retail giants such as Walmart, Tesco and Carrefour into the retail market(which is estimated as $450 billion), but they are allowed in million-plus cities in states which have agreed to back the measure.
For single-brand retail, the Cabinet decided that any firm seeking waiver of the mandatory 30 per cent local sourcing norms would have to set up a manufacturing facility in the country, the Union Commerce and Industry Minister Anand Sharma said.
In November last year, the government had approved 51 per cent FDI in multi-brand. This was, however, put on hold due to political opposition, including from UPA constituent Trinamool Congress.
The minister said since the implementation of the decision was put on hold, it had to go to the Cabinet again before going ahead with the decision.
