In a major reform push, the government has allowed 100% foreign direct investment (FDI) in single brand retail, civil aviation, defence, airports, pharmaceuticals, animal husbandry and food products. This second wave of FDI reforms after the last radical liberalization of FDI in November 2015, will provide job creation in India, improve infrastructure and make the investment climate in the country more beneficial for attracting foreign investment and technology. The decision was taken at a high-level meeting chaired by Prime Minister Narendra Modi.
In case of civil aviation, the government has allowed 100 percent FDI through automatic route for greenfield projects. For brownfield projects, first 74 percent will be through automatic route, but beyond 74 percent will require government approval. In defence sector, the first 49 percent of investment will be through automatic route. Beyond that, up to 74 percent investment will need government approval. The new norms have done away with the condition of access to ‘state-of-art’ technology in the country for FDI more than 49%.