Annexure

SECTOR SPECIFIC GUIDELINES FOR FOREIGN DIRECT INVESTMENT

S.No. Sector Guidelines
1. Banking NRI 40%

Foreign investment upto 20% is permitted
2. Non-banking financial services I) Upto 51% foreign equity, no special conditions are attached except those requiring approval of SEBI/RBI etc.
    II) For foreign equity beyond 51% but upto 75%, it is necessary that foreign investment should be minimum US $ 5 million and it should come in one lot.
    III)For foreign investment beyond75% minimum foreign investment should be US $ 50 million.
3. Domestic Air-Taxi Operations/Airlines (i) Foreign equity upto 40% can be permitted on a case-by-case basis.
    (ii)100% by NRIs.
4. Power Foreign investment in power sector can either be in the form of a joint venture with an Indian partner or as fully- owned operation with 100% foreign equity.
5. Telecommunications (Basic, Value Added) In basic , Cellular Mobile and paging services, foreign investments are limited to 49% subject to grant of licence from DoT.
6. Drugs and Pharmaceutical industry Foreign investment upto 51% in the case of bulk drugs, their intermediates and formulations thereof(except those produced by the use of recombinant DNA technology) are granted automatic approval by the RBI. Other proposals are considered on merit on a case-by-case basis by the Government. Manufacturing activity essential for FDI above 51% as per Drug Policy.
7. Petroleum Foreign companies can invest upto 100% of the equity in any venture in petroleum sector.
8. Real Estate No foreign investment in this sector is permitted. NRIs/OCBs are allowed.
9. Roads and Highways Private sector including foreign equity participation upto 100% in the highways is envisaged on Build, Operate and Transfer (BOT) concept. Investors in identified highway projects would be permitted to recover their investment by way of collection of tolls for specified periods. At the end of the agreed concession period, the facilities will revert to the Government. Construction of bypasses, bridges and widening of high density corridors, of National Highways have been identified for four laning through the BOT route. The Government has, in the Budget Session of 1995 passed the necessary legislation for collection of toll tax. The rates of toll charges as well as the period of concession will be on the basis of competition/bids and land requirement for the construction and operation of the facilities would be provided by the Government free from encumbrances. Private parties would also be allowed to develop service and the rest areas along the roads entrusted to them.
10. Ports Indian ports offer significant potential to foreign investors in major operational and infrastructural areas. The following areas have been identified for participation/investment by the private sector :
    (i) Leasing out existing assets of the Port.
    (ii) Construction/creation of additional assets, such as :
    (a) Construction and operation of container terminals.
    (b) Construction and operation of bulk, break bulk, multipurpose and specialised cargo berths.
    (c) Warehousing, Container Freight Stations, storage facilities and tank farms.
    (d) Cranage/Handling Equipment.
    (e) Setting up of captive power plants.
    (f) Dry docking and ship repair facilities.
    (iii)Leasing of equipment for port handling and leasing of floating crafts from the private sector.
    (iv) Captive facilities for Port based industries.
    These areas are indicative in nature. Further details regarding participation by the foreign investors are available with individual port authorities and the Ministry of Surface Transport, Government of India.
11. Tourism This is a sector with immense possibilities for foreign investment. 100% foreign equity is permissible in the sector and automatic approvals are also granted by the Reserve Bank of India for foreign equity upto 51% and subject to specified parameters.
12. Mining I) Foreign equity participation of upto 50% in the mining sector would be automatic, except for gold, silver diamond and precious stones.
    II) For gold, silver, diamonds and precious stones, approval would be given keeping in view inter alia, the following parameters:
    (a) Size of the project
    (b) Commitment of external resources for funding project cost
    (c) Track record of the company in the mining sector
    (d) The level of technology sought to be employed in the project
    (e) Financial strength of the company
    (f) Level of the Indian equity in the joint venture at the mining stage for the JV partner/Indian partner
    For companies which seek to set up 100 percent wholly owned subsidiaries, permission may be given subject to the condition that in case the company wishes to enter into a joint venture for investment in mining where a foreign equity holding in excess of 50 per cent is envisaged, prior approval of the FIPB would be taken.
13. Coal While this has been reserved for the public sector, private and foreign investment is permitted in coal for captive consumption only (generation of power) and for washeries, etc.
14. Venture Capital Fund An offshore venture capital company may contribute 100 per cent 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 VCF/VCCs.

 

 

Group Class Description
111   Production of natural gas
  111.1 Off-shore
  111.2 On-shore
     

DIVISION 12: MINING OF IRON ORE

120   Mining of iron ore
DIVISION 13 :MINING OF METAL ORES OTHER THAN IRON ORE
(Note: Mining of uranium group ores is classified in Div.14)
130   Mining of manganese ore
131   Mining of chromite
132   Mining of Bauxite
133   Mining of precious/semi precious metal ores
134   Mining of copper ore
135   Mining of lead and zinc ores
136   Mining of ilmenite, rutile, zircon and zirconium bearing ores
  136.1 Mining of ilmenite and rutile
  136.2 Mining of zircon and zirconium bearing ores
137   Mining of wolfram and other tungsten bearing ores
138   Mining of tin bearing ores
139   Mining of metal ores other than iron ore or uranium group ores n.e.c.

DIVISION 14 :MINING OF URANIUM AND THORIUM ORES

140   Mining of uranium and thorium ores
  140.1 Mining of uranium ores
  140.2 Mining of monazite and thorium ores

DIVISION 15 : MINING OF NON-METALLIC MINERALS NOT ELSEWHERE CLASSIFIED

150   Mining and quarrying of rock aggregates, sand and clays
  150.1 Mining/quarrying of marble
  150.2 Mining/quarrying of granite
  150.3 Mining/quarrying of slate-stone
  150.4 Mining/quarrying of sand-stone and other building stone and gravels, etc.
  150.9 Mining of sand, clays(ordinary) and other building/construction materials of mineral/ rock origin, n.e.c.
151   Mining/quarrying of minerals for construction other than rock aggregates, sand and clays (classified in group 150)
  151.1 Mining/quarrying of limestone, limeshell, 'kankar' and other calcareous materials
  151.2 Mining of asbestos
  151.3 Mining of gypsum including salenite
  151.4 Mining of vermiculite
  151.5 Mining of yellow and red ochre and red oxides
  151.9 Mining of other minerals for construction, n.e.c.
152   Mining of fertilizer and chemical minerals
  152.1 Mining of apatite and natural phosphate minerals
  152.2 Mining of flourspar (flourite)
  152.3 Mining of iron pyrites
  152.4 Mining of potash bearing minerals/salts
  152.5 Mining of sulphur
  152.9 Mining of other fertilizer and chemical minerals, n.e.c.
153   Mining of ceramic, refractory and glass minerals
  153.1 Mining of chinaclay (kaolin) and ballclay
  153.2 Mining of fireclay
  153.3 Mining of sillimanite, kyanite and andalusite
  153.4 Mining of diaspore
  153.5 Mining of magnesite
  153.6 Mining of dolomite
  153.7 Mining of graphite
  153.8 Mining of Felspar and silica minerals(quartz, silica sand, quartzite, etc.)
  153.9 Mining of calcite (including chalk), wollastonite and other ceramic, refractory and glass minerals, n.e.c.
154   Salt mining and quarrying including crushing, screening and evaporating in pans
  154.1 Salt mining/quarrying and screening, etc.
  154.2 Production of salt by evaporating in pans
155   Mining of mica
156   Mining of precious/semi-precious stones
  156.1 Mining of agate
  156.2 Mining of diamond
  156.3 Mining of emerald
  156.4 Mining of ruby
  156.5 Mining of sapphire
  156.9 Mining of other precious/semi-precious stones n.e.c.
159   Mining of other non-metallic minerals not elsewhere classified
  159.1 Mining of barytes
  159.2 Mining of steatite and pyrophyllite
  159.3 Mining of diatomite and diatomaceous earths
  159.4 Mining of bentonite and fullers earth
  159.5 Mining of garnet
  159.6 Mining of corundum
  159.9 Mining of other non-metallic minerals not elsewhere classified

DIVISION 19 : MINING SERVICES, NOT ELSEWHERE CLASSIFIED

190   Oil and gas field services, except exploration services (exploration services are classified in group 894)
191   Services incidental to mining such as drilling, shafting, reclamation of mines, etc.
199   Other mining services not elsewhere classified

SECTION 2 & 3 : MANUFACTURING

DIVISION 20-21: MANUFACTURE OF FOOD PRODUCTS

200   Slaughtering, preparation and preservation of meat
  200.1 Mutton-slaughtering, preparation
  200.2 Beef - slaughtering, preparation
  200.3 Pork - Slaughtering, preparation
  200.4 Poultry and other slaughtering, preparation
  200.5 Preservation of meats except by canning
  200.6 Processing and canning of meat
201   Manufacture of dairy products
  201.1 Manufacture of milk powder, ice-cream powder and condensed milk except baby milk foods
  201.2 Manufacture of baby milk foods
  201.3 Manufacture of butter, cream, ghee, cheese and khoya etc.
  201.4 Manufacture of pasteurised milk whether or not in bottles/polythene packs etc. (plain or flavoured)