New Delhi: The Narendra Modi government on Wenesday relaxed FDI rule for foreign single brand retailers and also permitted foreign investment in contract manufacturing and coal mining.
Briefing reporters on the decisions taken by the Union Cabinet headed by Prime Minister Narendra Modi, Commerce and Industry Minister Piyush Goyal said 100% Foreign Direct Investment (FDI) under automatic route in coal mining and associated infrastructure has been approved.
To boost domestic manufacturing, 100% FDI in contract manufacturing under automatic route has been allowed, Goyal said, adding that 26% FDI has been allowed in digital media.
On FDI in single brand retailing, the Cabinet has expanded the definition of mandatory 30% domestic sourcing norm. It also allowed single brand retailers to start online sales, waiving the previous condition of setting up a mandatory brick-and-mortar store, Goyal added.
In a classic example of what happens to the economy (especially the people at large) when the government lifts restrictions on business, Swedish furniture giant Ikea has been well on its way to creating as many as 10,000 jobs, both directly and indirectly, since last year in Maharashtra.
Readers may recall that vested interests and domestic traders’ cartels has been agitating for years to stop the entry of foreign multi-brand retailers in India, which have a far greater employment generating power.
In January 2018, the Narendra Modi 1.0 government had relaxed FDI norms in various sectors such as single brand retail and allowed foreign airlines to invest up to 49% in Air India. The then BJP-led Cabinet allowed overseas investors to invest 100% FDI in single-brand retail trading and construction development without any government approval.
Since February 2016, considerable progress has been reported in the matter of ease of doing of construction business in urban areas by streamlining procedures, adoption of appropriate technology and empowering urban local bodies to accord a wide range of approvals.