New Delhi, July 16 (ANI): Prime Minister Dr. Manmohan Singh, who met his senior Cabinet colleagues here on Tuesday, gave his nod to a proposal to hike the FDI cap in defence to 49 percent from 26 percent and in telecom to 100 percent from 74 percent.
Union Commerce and Industry Minister Anand Sharma, who briefed the media here after the Prime Minister discussed the proposal to hike FDI in various sectors with his Cabinet Ministers here this evening, said the FDI in the insurance and telecom sectors will be up to 49 percent through automatic route. But the FDI limit in telecom sector has been raised from 74 to 100 percent.
In single brand retail, the FDI will be through automatic route up to 49 percent and the remaining will be through FIPB route.
"FDI in asset reconstruction companies will be up to 49 percent through automatic route," he said.
Sharma said so far 26 percent of FDI is permitted in defence production, and added that it will through FIPB route for state of art technologies and investment beyond that will go to Cabinet committee on Security.
"That is the sectoral cap and it goes through the FIPB and the Cabinet approval route," said Sharma.
"26 percent sectoral cap will be there for FIPB scrutiny and approval route, but for proposals involving state of the art technologies in defence production FDI up to 26 percent that is beyond 26 percent will be approved by the Cabinet Committee on Security (CCS)," he added, while asserting that these decisions have been taken with proper consensus.
Today's meeting took place just days after Anand Sharma's and Finance Minister P. Chidambaram's visit to the United States to woo foreign investments.
The Defence Ministry as well as the Home Ministry had earlier raised concerns on raising the FDI cap in defence to 49 percent from the existing 26 percent.
Last month, the Finance Ministry had proposed sweeping changes in the FDI regime, favouring higher sectoral caps in almost all sectors, including defence, multi-brand retail and telecom.
Virtually doing away with the 26 percent ceiling, a committee headed by Economic Affairs Secretary Arvind Mayaram had recommended that FDI limit be raised to 49 percent in almost all sectors through the automatic route. (ANI)