The Government has put in place an investor friendly Foreign Direct Investment (FDI) policy, under which FDI, up to 100%, is permitted, on the automatic route, in most sectors/activities. FDI policy is reviewed on an ongoing basis, with a view to making it more investor friendly. Significant changes in the FDI policy regime have been made in the recent past, to provide further openings for Foreign Direct Investment in India.
As per extant FDI policy, FDI upto 26% is permitted in the defence sector with prior Government approval. FDI upto 100% is permitted in warehousing and food storage facilities on automatic route. There is no proposal under consideration to amend the policy.
FDI equity inflows from April 2009 to February 2013 in Warehousing sector (including Food grains storage) are as under:
| Sl No | Year (Apr-Mar) |
FDI (Rs crore) |
FDI (US$ million) |
| 1 | 2009-10 |
6.82 |
1.41 |
| 2 | 2010-11 |
45.82 |
10.15 |
| 3 | 2011-12 |
830.99 |
170.08 |
| 4 | 2012-13 (Apr-Feb) |
254.64 |
46.68 |
FDI equity inflows from April 2009 to February 2013 in Defence sector are as under:
| Sl No | Year (Apr-Mar) |
FDI (Rs crore) |
FDI (US$ million) |
| 1 | 2009-10 |
0.00 |
0.00 |
| 2 | 2010-11 |
0.00 |
0.00 |
| 3 | 2011-12 |
17.44 |
3.66 |
| 4 | 2012-13 (Apr-Feb) |
2.21 |
0.41 |
It is envisaged that the conditionalities built into the policy on FDI in multi brand retail trading would encourage agro-processing industries on account, inter-alia, of the large amount of capital infusion mandated in backend infrastructure including in processing, storage, warehousing and agriculture market produce infrastructure, etc. In addition to this, there are sector specific policies to encourage agro-processing industries. Small and medium enterprises could also participate in the setting up of backend infrastructure including logistics and cold storage chains.
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