Radical changes in FDI policy regime
The Union Government has radically liberalized the FDI regime, with the objective of providing major impetus to employment and job creation in India. The decision was taken at a high-level meeting chaired by Prime Minister Narendra Modi. This is the second major reform after the last radical changes announced in November 2015. Now most of the sectors would be under automatic approval route, except a small negative list. With these changes, India is now the most open economy in the world for FDI.
In last two years, Government has brought major FDI policy reforms in a number of sectors viz. Defence, Construction Development, Insurance, Pension Sector, Broadcasting Sector, Tea, Coffee, Rubber, Cardamom, Palm Oil Tree and Olive Oil Tree Plantations, Single Brand Retail Trading, Manufacturing Sector, Limited Liability Partnerships, Civil Aviation, Credit Information Companies, Satellites- establishment/operation and Asset Reconstruction Companies. Measures undertaken by the Government have resulted in increased FDI inflows at US$ 55.46 billion in financial year 2015-16, as against US$ 36.04 billion during the financial year 2013-14. This is the highest ever FDI inflow for a particular financial year. However, it is felt that the country has potential to attract far more foreign investment which can be achieved by further liberalizing and simplifying the FDI regime. India has been rated as Number 1 FDI Investment Destination by several International Agencies.
Accordingly the Government has decided to introduce a number of amendments in the FDI Policy. Changes introduced in the policy include increase in sectoral caps, bringing more activities under automatic route and easing of conditionalities for foreign investment. These amendments seek to further simplify the regulations governing FDI in the country and make India an attractive destination for foreign investors.
1. Radical Changes for promoting Food Products manufactured/produced in India
It has now been decided to permit 100% FDI under government approval route for trading, including through e-commerce, in respect of food products manufactured or produced in India.
2. Foreign Investment in Defence Sector up to 100%
Present FDI regime permits 49% FDI participation in the equity of a company under automatic route.
Foreign investment beyond 49% has now been permitted through government approval route, in cases resulting in access to modern technology in the country or for other reasons to be recorded. The condition of access to ‘state-of-art’ technology in the country has been done away with. FDI limit for defence sector has also been made applicable to Manufacturing of Small Arms and Ammunitions covered under Arms Act 1959.
3. Review of Entry Routes in Broadcasting Carriage Services
100% FDI under Automatic route is permitted in the following:
(1)Teleports(setting up of up-linking HUBs/Teleports);
(2)Direct to Home (DTH);
(3)Cable Networks (Multi System operators (MSOs) operating at National or State or District level and undertaking upgradation of networks towards digitalization and addressability);
(4)Mobile TV;
(5)Headend-in-the Sky Broadcasting Service(HITS)
Cable Networks (Other MSOs not undertaking upgradation of networks towards digitalization and addressability and Local Cable Operators (LCOs))
Infusion of fresh foreign investment, beyond 49% in a company not seeking license/permission from sectoral Ministry, resulting in change in the ownership pattern or transfer of stake by existing investor to new foreign investor, will require FIPB approval
4. Pharmaceutical
The extant FDI policy on pharmaceutical sector provides for 100% FDI under automatic route in greenfield pharma and FDI up to 100% under government approval in brownfield pharma. With the objective of promoting the development of this sector, it has been decided to permit up to 74% FDI under automatic route in brownfield pharmaceuticals and government approval route beyond 74% will continue.
5. Civil Aviation Sector
(i) The extant FDI policy on Airports permits 100% FDI under automatic route in Greenfield Projects and 74% FDI in Brownfield Projects under automatic route. FDI beyond 74% for Brownfield Projects is under government route.
(ii) With a view to aid in modernization of the existing airports to establish a high standard and help ease the pressure on the existing airports, it has been decided to permit 100% FDI under automatic route in Brownfield Airport projects.
(iii) As per the present FDI policy, foreign investment up to 49% is allowed under automatic route in Scheduled Air Transport Service/ Domestic Scheduled Passenger Airline and regional Air Transport Service. It has now been decided to raise this limit to 100%, with FDI up to 49% permitted under automatic route and FDI beyond 49% through Government approval. For NRIs, 100% FDI will continue to be allowed under automatic route. However, foreign airlines would continue to be allowed to invest in capital of Indian companies operating scheduled and non-scheduled air-transport services up to the limit of 49% of their paid up capital and subject to the laid down conditions in the existing policy.
6. Private Security Agencies
The extant policy permits 49% FDI under government approval route in Private Security Agencies. FDI up to 49% is now permitted under automatic route in this sector and FDI beyond 49% and up to 74% would be permitted with government approval route.
7. Establishment of branch office, liaison office or project office
For establishment of branch office, liaison office or project office or any other place of business in India if the principal business of the applicant is Defence, Telecom, Private Security or Information and Broadcasting, it has been decided that approval of Reserve Bank of India or separate security clearance would not be required in cases where FIPB approval or license/permission by the concerned Ministry/Regulator has already been granted.
8. Animal Husbandry
As per FDI Policy 2016, FDI in Animal Husbandry (including breeding of dogs), Pisciculture, Aquaculture and Apiculture is allowed 100% under Automatic Route under controlled conditions. It has been decided to do away with this requirement of ‘controlled conditions’ for FDI in these activities.
9. Single Brand Retail Trading
It has now been decided to relax local sourcing norms up to three years and a relaxed sourcing regime for another five years for entities undertaking Single Brand Retail Trading of products having ‘state-of-art’ and ‘cutting edge’ technology.
The amendments to the FDI Policy are meant to liberalise and simplify the FDI policy so as to provide ease of doing business in the country leading to larger FDI inflows contributing to growth of investment, incomes and employment.
FDI continues to be prohibited in lottery, gambling, atomic energy, Real Estate Investment Trusts and Railway operations.
Source : PIB, The Hindu
Use of potassium bromate as food additive banned
The government banned the use of potassium bromate as a food additive following a Centre for Science and Environment (CSE) study that found its presence in bread caused cancer.
“FSSAI [Food Safety Standards Authority of India] has banned potassium bromate,” said its CEO Pawan Kumar Agarwal. “A notification has been issued in this regard. As far as potassium iodate is concerned, it has been referred to a scientific panel.”
Potassium iodate is also used as a food additive and it too is said to be carcinogenic.
A CSE study had found that 84 per cent of 38 commonly available brands of pre-packaged breads, including pav and buns, tested positive for potassium bromate and potassium iodate. The two food additives are banned in many countries and are listed as “hazardous” to public health. According to CSE, potassium bromate typically increases dough strength, leads to higher rising and gives uniform finish to baked products. Potassium iodate is a flour treatment agent.
Source : The Hindu
25 years of FDI policy changes
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Source : The Hindu
Chinese supercomputer is world’s fastest machine
A new Chinese computer system that can make 93 quadrillion calculations per second has claimed the top spot on the list of the world’s most powerful supercomputers. The computer called Sunway TaihuLight developed by the National Research Centre of Parallel Computer Engineering and Technology (NRCPC) is built entirely using processors designed and made in China. It is intended for use in engineering and research including climate, weather, life sciences, advanced manufacturing and data analytics.
It would take 7.2 billion people using electronic calculators 32 years, or two million desktop computers working together for one minute, to do the same calculation the computer can solve in just 60 seconds.
The supercomputer, which is installed at the National Supercomputing Centre in China, displaced Tianhe-2, an Intel-based Chinese supercomputer that has claimed the top spot on the past six TOP500 lists. The closely watched list is issued twice a year.
Sunway TaihuLight is twice as fast and three times as efficient as Tianhe-2, which posted a performance of 33.86 quadrillions of calculations per second.
Titan, a Cray X40 system installed at the U.S. Department of Energy’s (DOE) Oak Ridge National Laboratory, is now at the third position, with 17.59 quadrillions of calculations per second.
Sequoia, an IBM BlueGene/Q system installed at DOE’s Lawrence Livermore National Laboratory and Fujitsu’s K computer installed at the RIKEN Advanced Institute for Computational Science (AICS) in Japan are at the fourth and fifth positions respectively.
Other systems in the top ten include a BlueGene/Q system called Mira in the U.S., a Cray X40 system known as Trinity, and the most powerful system in Europe — a Cray XC30 system called Piz Daint at the Swiss National Supercomputing Centre.
Hazel Hen installed at HLRS in Germany and Shaheen II in King Abdullah University of Science and Technology (KAUST) in Saudi Arabia, both Cray XC40 systems, are at the ninth and tenth positions.
The latest list marks the first time since the inception of the TOP500 that the U.S. is not home to the largest number of systems.
With a surge in industrial and research installations registered over the last few years, China leads with 167 systems and the U.S. is second with 165. China also leads the performance category, thanks to the top two systems on the list.
Among countries with the most computers on the top 500 list, Germany was in fourth place with 26 systems, France was next with 18, followed by Britain with 12.
Source : The Hindu