Date:25/01/2006 URL: http://www.thehindubusinessline.com/2006/01/25/stories/2006012502510100.htm

Back 51% FDI in single brand retail cleared

Our Bureau

Norms revised for power trading, processing and warehousing of rubber and coffee, diamond and coal mining, airports and petroleum infrastructure.

New Delhi , Jan. 24

AS part of a big move to liberalise the foreign direct investment (FDI) regime, the Cabinet today approved new FDI norms for several sectors including retailing.

It has allowed up to 51 per cent FDI in single brand retailing by foreign companies Reebok and Louis Vuitton. As of now, single brand retailers operate through the franchisee route and there is a strong view that FDI in this segment would not displace jobs or impact the local industry but help create employment.

The Cabinet has also revised the terms and conditions for FDI power trading, processing and warehousing of rubber and coffee, diamond and coal mining, airports and petroleum infrastructure like laying of pipelines. FDI up to 100 per cent has been permitted under the Reserve Bank of India's automatic route.

Earlier a Group of Ministers (GoM) headed by the Agriculture Minister, Mr Sharad Pawar, had reviewed these norms.

The idea of opening up more sectors is to attract more foreign capital by reducing the levels of control in most sectors, officials said.

The Cabinet also approved doing away with multiple approvals for foreign investments from various agencies, particularly in banking and insurance.