India relaxes foreign direct investment rules in four sectors, allows 100% FDI in coal mining

India’s government on Wednesday announced it was easing rules on Foreign Direct Investment in four sectors, including single-brand retail, digital media, coal mining and manufacturing.

Indian Minister Piyush Goyal announced that the Union Cabinet has approved 100 per cent foreign direct investment (FDI) in coal mining and associated infrastructure. It will allow 100 per cent FDI in contract manufacturing, and approved 26 per cent FDI in digital media, with government approval.

“FDI regulations have been liberalised. FDI regime has been simplified. This will also boost employment for the youth. We see an opportunity to make India a manufacturing hub,” said Goyal.

Seeking to make India more attractive FDI destination globally, the government is examining the possibility of further easing FDI rules in aviation, media (animation) and insurance sectors in consultation with all stakeholders.

The announcement was expected following the budget announcement last month.

Indian equity markets closed lower on Wednesday ahead of the release of the gross domestic product (GDP) data for the first quarter of financial year 2019-20 on August 31, which was expected to indicate slower growth rate for the fourth consecutive quarter.

Earlier this week, the Reserve Bank of India had approved a record $24 billion pay out, a controvertible move that was criticised by Congress chief Rahul Gandhi.

A liberal FDI regime is expected to attract foreign players to invest in the country which is facing a slowdown.

Seeking to make India more attractive FDI destination globally, Sitharaman had said that government would examine suggestions of further opening up of FDI in aviation, media (animation) and insurance sectors in consultation with all stakeholders.