ARTICLE · 14 JULY 2016

FDI Policy Changes: Moving Towards An ‘Automatic' Regime

Vaish Associates Advocates

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The Union Government, on June 20, 2016, announced certain major policy reforms to further liberalise FDI rules in India, in order to give a boost to manufacturing in India and facilitate employment and job creation.

IndiaGovernment, Public Sector

Sargam Marwaha, Associate, Vaish Associates

V Vasudev, Senior Associate, Vaish Associates Advocates

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The Union Government, on June 20, 2016, announced certain major policy reforms to further liberalise foreign direct investment (FDI) rules in India, in order to give a boost to manufacturing in India and facilitate employment and job creation.

In pursuance to the said announcement, Department of Industrial Policy and Promotion ("DIPP") has, on June 24, 2016, issued Press Note No. 5 (2016 Series) ("Press Note") amending the Consolidated FDI Policy Circular of 2016 as issued on June 7, 2016 ("FDI Policy").

The changes brought in vide the Press Note include increase in sectoral caps, bringing more activities under the automatic route and easing of conditionalities imposed for FDI in certain important sectors, the details of which have been discussed hereunder:

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