FOREIGN DIRECT INVESTMENT CAPS
FDI Caps for disinvestment, unless other wise indicated, would be the same as for investment in the sector. Currently, the investment guidelines in different sector are indicated below:
Sl.No
Sector
Guidelines
1. Banking NRI 40%. Foreign investment of up to 20% by banking companies or finance companies including multilateral financial institutions.
Non Banking Financial Companies (NBFC) NRI holding upto 40%. Foreign investment of upto 20% by foreign banking companies or finance companies including multilateral financial institutions.

The automatic route is not available.

ii) Minimum Capitalisation Norms for fund based NBFCs:

For FDI upto 51% - US$ 0.5 million to be brought upfront

For FDI above 51% and upto 75% - US $ 5 million to be brought upfront

For FDI above 75% and upto 100% - US $ 50 million out of which US $ 7.5 million to be brought upfront and the balance in 24 months

100% NBFC Holding Company with a minimum capital of US $ 50 million allowed to set up a 100% downstream subsidiary to undertake specific NBFC activities. Such a subsidiary required to dis-invest its equity to the minimum extent of 25%, through a public offering only, within a period of 3 years.

iii) Minimum capitalisation norms for non-fund based activities: Minimum capitalisation norm of US $ 0.5 million is applicable in respect of all permitted non-fund based NBFCs with foreign investment. The automatic route is not available.
2. Civil Aviation (detailed guidelines have been issued by Ministry of Civil Aviation) (detailed guidelines have been issued by Ministry of Civil Aviation) In the domestic Airlines sector:

i)  FDI upto 40% permitted subject to no direct or indirect     equity participation by foreign airlines is allowed.

ii) 100% investment by NRIs/OCBs.

iii) The automatic route is not available.
3. Telecommunication i)  In basic, Cellular Mobile, paging and Value Added    service, Global Mobile Personal Communications by    Satellite and Internet Service Provider (ISP), FDI is    limited to 49% subject to grant of licence from    Department of Telecommunications and adherence by    the companies to the licence conditions for foreign equity    cap and lock in period for transfer and addition of equity    and other licence provisions.

ii) No equity cap is applicable to manufacturing activities.
4. Petroleum(other than Refining) i)  Under the exploration policy, FDI utpo 100% is allowed     for small fields through competitive bidding; upto 60% for     unincorporated JV; and upto 51% for incorporated JV     with a No Objection Certificate for medium size fields.

ii)  For petroleum products and pipeline sector, FDI is     permitted upto 51%.

iii) FDI is permitted upto 74% in infrastructure related to     marketing and marketing of petroleum products.

iv) 100% wholly owned subsidiary(WOS) is permitted for     the purpose of market study and formulation.

v) 100% wholly owned subsidiary is permitted for     investment/Financing.

vi) For actual trading and marketing, minimum 26% Indian     equity is required over 5 years.
Petroleum(Refining) i) FDI is permitted upto 26% in case of Public Sector Units.    PSUs will hold 26% and balance 48% by public.    Automatic route is not available.

ii) In case of private Indian companies, FDI is permitted    upto 100% under automatic route.
5. Housing & Real Estate No foreign investment is permitted in this sector. NRIs/OCBs are allowed to invest.
6. Coal and Lignite i)  Private Indian companies setting up or operating power     projects as well as coal or lignite mines for captive     consumption are allowed FDI upto 100%.

ii) 100% FDI is allowed for setting up coal processing     plants subject to the condition that the company shall     not do coal mining and shall not sell washed coal or     sized coal from its coal processing plants in the open     market and shall supply the washed or sized coal to     those parties who are supplying raw coal to coal     processing plants for washing or sizing.

iii) FDI upto 74% is allowed for exploration or mining of coal     or lignite for captive consumption.

iv) In all the above cases, FDI is allowed upto 50% under     the automatic route subject to the condition that such     investment shall not exceed 49% of the equity of a PSU.
7. Venture Capital Fund(VCF) and Venture Capital Company(VCC) An offshore venture capital company may contribute upto 100% of the capital of a domestic venture capital fund and may also set up a domestic asset management company to manage the fund.

VCFs and VCCs are permitted upto 40% of the paid up corpus of the domestic unlisted companies. This ceiling would be subject to relevant equity investment limit in force in relation to areas reserved for SSI. Investment in a single company by a VCF/VCC shall not exceed 5% of the paid-up corpus of a domestic VCF/VCC.

The automatic route is not available.
8. Trading Trading is permitted under automatic route with FDI upto 51% provided it is primarily export activities, and the undertaking is an export house/trading house/super trading house/star trading house. However, under the FIPB route:-

i) 100% FDI is permitted in case of trading companies for    the following activities:
   · exports;
   · bulk imports with export/exbonded warehouse      sales;
   · cash and carry wholesale trading;
   · other import of goods or services provided at least      75% is for procurement and sale of goods and      services among the companies of the same group      and for third party use or onward      transfer/distribution/sales.

ii) FDI upto 100% permitted for E-commerce activities    subject to the condition that such companies would    divest 26% of their equity in favour of the Indian public in    five years, if these companies are listed in other parts of    the world. Such companies would engage only in    business to business (B2B) e-commerce and not in retail    trading.
9. Investing companies in infrastructure/ service sector Infrastructure/service sector direct investment upto sector cap. Investing company will not set off against this cap.

The automatic route is not available.
10. Atomic energy FDI/NRI/OCB investments through FIPB (as per detailed guidelines issued by Department of Atomic Energy vide Resolution No.8/1(1)/97-PSU/1422 dated 6.10.98) allowed in:

i)  Mining and mineral separation
ii) Value addition per se to the products of (a) above
iii) Integrated activities (comprising of both (a) and (b)     above.

The following FDI participation is permitted:

i) Upto 74% in both pure value addition and integrated     projects.
ii) For pure value addition projects as well as integrated     projects with value addition upto any intermediate     stage, FDI is permitted upto 74% through joint     venture companies with Central/State PSUs in which     equity holding of at least one PSU is not less than     26%.
iii) In exceptional cases, FDI beyond 74% will be     permittedsubject to clearance of the Atomic Energy     Commission before FIPB approval.
11. No FDI/NRI/OCB investment is permitted
- Defence and strategic industries
- Agriculture (including plantation
- Print Media
- Broadcasting
12. Power Upto 100% FDI allowed
13. Drugs & Pharmaceuticals i)  FDI upto 74% in bulk drugs, their intermediates and     formulations (except those produced by the use of     recombinant DNA technology) would be under     automatic route.

ii) FDI above 74% for manufacture of    bulk drugs on    case to case basis.
14. Roads & Highways, Ports and Harbours. FDI upto 100% under automatic route.
15. Hotels & Tourism

100% FDI is permissible in the sector.

Automatic route is available upto 51% subject to:
foreign technology agreements covers
i)  upto 3% of the capital cost of the project is proposed     to be paid for technical and consultancy services     including fees for architects, design, supervision, etc.

ii) upto 3% of net turnover is payable for franchising and     marketing/publicity support fee, and iii upto 10% of     gross operating profit is payable for4management fee,     including incentive fee.

16. Mining. i)  For exploration and mining of diamonds and precious     stones FDI is allowed upto 74% under automatic     route.

ii) For exploration and mining of gold and silver and     minerals other than diamonds and precious stones,     metallurgy and processing FDI is allowed upto 100%     under automatic route.
iii) Press Note No. 18 (1998 series) dated 14.12.98     would not be applicable for setting up 100% owned     subsidiaries in so far as the mining sector is concerned,     subject to a declaration from the applicant that he has     no existing joint venture for the same area and / or the     particular mineral.
17. Postal services Couriers carrying packages, parcels and other items which do not come within the ambit of Indian Post Office Act 1998 shall not be permitted.
18. Pollution Control and management FDI upto 100% in both manufacture of pollution control equipment and consultancy for integration of pollution control systems is permitted under automatic route.
19. Advertising and Films Automatic approval is available for the following:
·  Upto 74% FDI in advertising sector
·  Upto 100% FDI in film industry (i.e. film financing,    production, distribution, exhibition, marketing and    associated activities relating to film industry) subject to    the following:

i)  Companies with an established track record in films,     TV, music, finance and insurance would be permitted.

ii) The company should have a minimum paid up capital     of US $ 10 million if it is the single largest equity     shareholder and at least US $ 5 million in other cases.

iii) Minimum level of foreign equity investment would be     US $ 2.5 million for the single largest equity     shareholder and US $ 1 million in other cases.

iv) Debt equity ratio of not more than 1:1, i.e., domestic borrowings shall not exceed equity.
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