Box 7.3
Extent of permissible foreign equity by NRIs/OCBs/PIOs/FIs/FIIs
------------------------------------------------------------------------------------------------------------------------
Areas of Investment NRIs/OCBs/PIOs FIs/FIIs
------------------------------------------------------------------------------------------------------------------------
1. a) 35 priority industries announced 100% equity, repatriable, automatic 51% equity, repatriable, automatic
in July 1991 approval by RBI approval by RBI
b) 9 High priority industries in 74% equity, repartriable, automatic 74% equity, repatriable, automatic
sector announced in Dec. 1996 approval by RBI approval by RBI
c) 13 priority industries announced 51% equity. repatriable, automatic 51% equity, repatriable, automatic
in Dec. 1996 approval by RBI approval by RBI
d) Export/Trading/Star trading Investment upto 100% 51% equity, repatriable, automatic
house approval by RBI
2. 100% EOUs and units in FTZ and 100% equity, automatic approval by 100% equity, repatriable, automatic
EPZ, Software and Hardware SIA/DC (EPZ) approval by SIA/DC (EPZ)
Technology Parks
3. Sick industries 100% private placement prior
approval by RBI
4. Mining 50% automatic approval by SIA/FIPB 50% Automatic approval by SIA/FIPB
5. Telecommunications upto 49% with approval in basic upto 49% with approval in basic
cellular mobile and paging, VSAT and cellular mobile and paging, VSAT and
other wireless services and upto 51% other wireless services and upto 51%
with approval in other value added with approval in other value added
services (not to be offset against the services (not to be offset against the
FDI in the investment company with FDI in the investment company with
Indian ownership). Indian ownership).
6. Entertainment electronics 51% equity automatic approval 51% equity automatic approval
7. Power upto 100% with approval upto 100% with approval
8. Medical clincs, hospitals, shipping upto 100% equity, repatriable, prior upto 100% equity, repatriable, prior
oil exploration, deepsea fishing, ind. approval by SIA approval by SIA
with licenses
9. Industries reserved for SSI upto 24% repatriable prior approval upto 24% equity prior SIA approval
by SIA export obligations export obligations.
10. Housing, real estate, business 100% equity on repatriation basis, No foreigh investment is allowed
centre, infrastructural facilities. automatic approval except for company property.
11. Domestic air taxi operations upto 100% with approval upt to 40% with approval
12. Banking services upto 40% with approval upto 20% with approval
13. Non-banking Financial Companies upto 51% with no conditions, upto upto 51% with no conditions, upto
(NBFCs) 100% with conditions 100% with conditions
14. a) Disinvested shares of PSE's NRIs/OCBs are permitted to invest on Only FIIs are permitted to invest on
b) Units in UTI these shares/units/funds on a repatri- these shares/units/funds on a
c) Public sector mutual funds able basis through both primary and repatriable basis through both
d) Private sector mutual funds secondary markets. primary and secondary markets. FIIs
are also allowed to invest on dated
govt. securities under certain
conditions
15. Portfolio Investement (Inv. in Individual celling 1%, collective Only FIIs are permitted to invest
Shares & Debentures) ceiling 5%, relaxable to 24% by subject to individual ceiling of 10%
General Body Resolution only in annd collective ceiling of 24% in both
listed company stock share. Permitted listed and unlisted companies. 100%
to invest in unlisted companies. investment in debt securities of
companies by registered FII Debt
Funds also allowed.
------------------------------------------------------------------------------------------------------------------------
NRIs=Non-resident Indians, PIOs=Persons of Indian origin EOU=Export Oriented Unit
OCBs=Overseas Corporate Bodies, FIs=Foreign Investors EPZ=Export Processing Zone
FIIs=Foreign institutional Investors SIA=Secretariat for Industrial approvalsFTZ=Free Trade Zone
------------------------------------------------------------------------------------------------------------------------
From the database of Ministry of Finance disseminated on Internet through NICNET