ET has reliably gathered that these measures are drawn from proposals by a high-powered Niti Aayog panel, which has favoured FDI through the government route in the proposed new regulatory framework for atomic energy.
The broad view in the government is that while the nuclear energy sector needs public private participation for growth, current rulebooks hinder modernisation, transfer of advanced technology and fund flow for capital-intensive large-scale projects.
The Centre has already listed the Atomic Energy Bill, 2025, for the Parliament session which is likely to enable the FDI regime, besides major policy shifts. ET has reported plans for an umbrella atomic energy law that will open doors for the private sector. Currently, FDI is prohibited in sectors that are not open to domestic private investment.
The other critical area is insurance where the suggestion is to amend the 2020 FDI policy and increase the FDI limit from 74% to 100% for insurance companies investing their entire premium within India. For this, the Insurance Laws (Amendment) Bill is lined up in the final parliamentary session of 2025.
Defence comes next as FDI in this critical sector is impacted by Para 5.2.6 of the FDI policy which restricts FDI over 74% to only under government route and with conditions on access to modern technology. In brownfield expansion, FDI beyond 49% also lands in the government route mode.The proposal is to try and do away with ‘modern technology’ transfer conditions. Plus, there is a fresh look being given to increase FDI limit under the automatic route from 49% to 74% in case of a company with industrial licence or for a company which has government approval for FDI in defence. This is expected to be done by the year end, ET has learnt.Agriculture/plantation sector is the next identified for FDI boost. The government is believed to be working on proposals to make amendments to allow 100% FDI under automatic route for sandalwood, cocoa, banana, spices like pepper and are canut, bamboo, sugarcane among others, except tobacco. The 100% FDI through the automatic route is currently only permitted in tea, coffee, rubber, cardamom, olive oil and palm oil tree plantations. In agriculture, it is available to floriculture, horticulture, cultivation of vegetables and mushrooms in controlled conditions, animal husbandry, pisciculture and apiculture.
Centre’s press note 3-linked restrictions on Chinese investments are also likely to be eased up.
Sources said there is a suggestion to look at FDI in the inventory-based model of e-commerce (largely domestic e-commerce companies) where inventory of goods is owned by an e- commerce entity and sold directly to consumers. Foreign investors currently can only operate through the marketplace model in India, such as Amazon — a platform for third-party sellers.
On fast-tracking India’s FDI approval process, the government is examining a suggestion to set up a Committee of Secretaries under the Cabinet Secretary to recommend approvals for FDI under the government route.
A task force under a proposed National Manufacturing Mission is under consideration to reach out to top-100 global companies and facilitate investment by them in the country. ‘Invest India’ is likely to come under the new mission’s ambit, ET has gathered.
The panel has sought rationalisation of sectoral guidelines in nine areas to align them with the FDI policy. These are banking and financial services, trading and e-commerce, agriculture and plantation, defence and civil aviation, construction and infrastructure, information and broadcasting, healthcare, mining and energy besides space.