Recent Reforms In India's Foreign Direct Investment Policy

1. INTRODUCTION

Earlier this month, the government of India eased restrictions on foreign direct investment ("FDI") in India with a view to promoting the 'Make in India' and 'Startup India' initiatives¹.

The reforms are wide ranging and aim to ease doing business, simplifying and rationalizing the process of FDI. The key highlight of the recent reforms is that more FDI proposals in more sectors will now be placed under the automatic route and not require the consent of the government. Of particular note is the liberalization in the Broadcasting, Construction, Defense and Single Brand Retailing sectors.

2. SECTORS LIBERALIZED

We set out below the key differences between the old FDI policy and the new FDI policy in each of sector of the economy (or transaction type) that has been further liberalized.