Tuesday January 12 2016

News Source: Global Disclosures

Focus: Foreign Investment

Type: General

Country: India




The Ministry of Commerce and Industry’s, Department of Industrial Policy and Promotion (DIPP) announced that it is preparing the Consolidated Foreign Direct Investment Policy Circular of 2016.

The DIPP initially introduced a Consolidated FDI Policy Circular (Circular 1) on 31/10/2010, consolidating all the information on FDI policy at one place, which incorporated all earlier press notes, press releases and clarification regarding government policy on FDI.

The 2016 FDI Circular will replace the 2015 Circular of May 12, 2015, as amended on November 24, 2015 and incorporate various press notes related to FDI issued since 12 May 2015.

Relevant press notes released subsequent to 12 May 2015 include the following:

  1. Press note 6, effective from 18 June 2015: 
  • Concerning a review of the investment limit for cases requiring prior approval of Foreign Investment Promotion Board (FIPB) / Cabinet Committee of Economic Affairs (CCEA), which increases the limits from Rs. 2000 crore to Rs. 3000 crore.

    2. Press note 8, effective from 30 July 2015: 

  • Concerning the introduction of composite caps to sectors within the FDI Policy. Previously, these sectors had sub-limits with overall and varying caps. The composite caps removes the inclusion of sub-limits, with only sector caps being maintained. For example, portfolio investment, up to aggregate foreign investment level of 49% or the statutory cap, whichever is lower, will not require either Government approval or compliance with statutory conditions of the FDI policy, provided the investment does not result in a transfer of an Indian entity to non-resident entities.
  • Additionally it is clarified that there are no sub-limits of portfolio investment, however separate limits will remain for banking sectors, where despite the statutory cap being 74%, FII/FPI/QFI investment limits will continue to be within 49% of the total paid up capital of the company.

Comments / suggestions on the Consolidated Foreign Direct Investment Policy Circular, 2015 are invited from stakeholders by 18/01/2016, which can be submitted to the following email address:

Email: fc-dipp@nic.in 


The FDI Circular of 12 May, 2015 can be viewed at the above link: