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Indian Commerce Minister Anand Sharma said late Tuesday in New Delhi that FDI caps in telecom, defence and insurance have been hiked.
Thirteen sectors were opened up for FDI but no announcement was made on multi-brand retail with the minister saying it would be taken up separately.
“Decision taken with regard to FDI caps in various sectors; in some sectors limit will remain the same but route will change,” said Sharma.
Sharma was speaking after a Cabinet meeting on economic affairs chaired by the Prime Minister Manmohan Singh.
The government also decided to allow 26 per cent FDI in the defence sector through automatic route and 49 per cent after clearance from the Cabinet Committee on Security (CCS).
However, FDI in defence will be on a case-to-case basis after clearance from India’s CCS.
Foreign direct investment in the Indian telecom sector has been raised from the present 74 per cent to 100 per cent.
The decisions were “unanimous” said the minister, who also asserted that India is a top FDI destination.
“We are one of the first three favoured destinations for FDI. Doing better than last year,” he said.
R Sukumar, Editor of business daily LiveMint, said the biggest surprise was in the defence sector.
“It is largely procedural easing in most areas but the big change is in defence where in some cases 100 percent FDI is now allowed. They have, however, steered clear of controversial sectors like media and retail, ” Sukumar told The BRICS Post.
“Will this result in huge inflows that will help the cause of the rupee? I am not sure,” Sukumar added.
TBP with inputs from Agencies