Mr Piyush Goyal

As per the present FDI policy, 100 per cent FDI under automatic route is allowed for coal and lignite mining for captive consumption by power projects, iron and steel and cement units and other eligible activities permitted under and subject to applicable laws and regulations.

Further in a bid to provide clarity on contractual manufacturing, the cabinet also permitted 100 per cent FDI in the sector through the automatic route. The existing FDI policy provides for 100 per cent FDI under automatic route in the manufacturing sector but there was no specific provision for contractual manufacturing. The Union Cabinet allowed 100 per cent foreign direct investment (FDI) in contractual manufacturing through the automatic route. An official statement said that the decision has been taken to in order to provide clarity on contract manufacturing in the country. “Subject to the provisions of the FDI policy, foreign investment in ‘manufacturing’ sector is under automatic route.

“With a view to provide greater flexibility and ease of operations to SBRT entities, it has been decided that all procurements made from India by the SBRT entity for that single brand shall be counted towards local sourcing, irrespective of whether the goods procured are sold in India or exported,” Commerce Minister Piyush Goyal told reporters after the cabinet meeting.