India’s cabinet on Wednesday eased regulations for Foreign Direct Investment (FDI) in key sectors such as single-brand retail, construction and civil aviation in an effort to increase economic growth.
Until now, FDI of up to 49 per cent was permitted in both sectors, but beyond 49 per cent, government approval was required.
“A cabinet meeting, chaired by Prime Minister Narendra Modi, gave investors the go-ahead to invest 100 per cent in single-brand retail and other sectors without government’s approval,’’ Government Spokesman, Frank Noronha, said.
The cabinet also allowed foreign airlines to invest up to 49 per cent in the debt-ridden national carrier, Air India, subject to government’s approval.
India has secured robust foreign investment inflows in recent years, but its economic growth has slowed recently.
A government forecast said growth in Asia’s third-largest economy will slow to 6.5 per cent in the financial year 2017 to 2018 against the previous year’s 7.1 per cent.
India’s financial year runs from April to March.