NEW DELHI: The government said it has reformed and liberalised norms for foreign direct investment in 15 sectors and targeted having 97 pct of FDI approvals under the automatic route.

"A press note has been issued in this regard. The government has put everything on the automatic route. Up to 92 pct of foreign direct investment (FDI) is now on the automatic (approval) route and we are targeting 97 pct," Amitabh Kant, industrial policy and promotion (DIPP) secretary, said while addressing the 95th annual session of industry chamber Assocham here.

The key changes in the FDI regime include raising the limit for FDI approvals from the Foreign Investment Promotion Board (FIPB) to 5,000 crore from 3,000 crore; increasing foreign-investor limits in several sectors including private banks, defence and non-news entertainment media; and allowing property developers to sell completed projects to foreign investors without lock-in periods.

The crux of these reforms is to further ease and simplify the process of foreign investments in the country and to put more and more proposals on the automatic route instead of the more time-consuming and procedural government route.

The FIPB earlier considered foreign investment proposals of inflow up to 3,000 crore and those above that limit required approval of the Cabinet Committee on Economic Affairs.

The construction sector will be a major beneficiary as the changes in FDI norms have been brought in to boost the demand for items like steel and cement with the aim of building 50 million affordable houses for the poor.

Several conditions have been removed including the restriction of floor area of 20,000 sq.m. in construction development projects and minimum capitalisation of $5 million which needed to be brought in within six months of starting business.

Foreign investors in construction have been allowed to exit and repatriate their investment under the automatic route before completion of the project provided they complete a lock-in period of three years.

The DIPP will shortly consolidate all FDI related instructions contained in various notifications and press notes and prepare a booklet so that investors do not have to refer to several documents issued at different times.

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