Sector: Agriculture
Sub-Sector: Farming & Plantations
Industrial Classification: 00 (Agricultural production); 01 (Plantations)
Type of Reservation: National Treatment (Article 10.3)
Description:
FDI is not allowed in any agricultural/plantation sector/activity except the following:
(i) FDI is allowed up to 100% under the automatic route in Floriculture, Horticulture, development of seeds, animal husbandry, pisciculture, aqua-culture and cultivation of vegetables and mushrooms under controlled conditions and services related to agro and allied sectors*.
(ii) FDI up to 100% is allowed with prior Foreign Investment Promotion Board (FIPB) permission in the Tea sector including tea plantations subject to : i) the foreign investor undertaking to divest 26% equity in favour of Indian partner/Indian public within 5 years and ii) prior approval of the state government concerned in case of any change in land use in future.
Reservation Measure:
Foreign Exchange Management (Permissible Capital Account Transactions) Regulations, 2000- Regulation 4 (b).
Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000- Annex A (B) to Schedule 1.
Government Policy.- Press Note 4(2006).
* "under controlled conditions" means in a non-natural environment that is intensively manipulated by human intervention for the purpose of plant production. General characteristics of controlled conditions may include but are not limited to tillage, fertilization, weed and pest control, irrigation, or nursery operations such as potting, bedding or protection from weather.
"services related to agro and allied sectors" includes pest destroying, spraying and pruning of infected stems, operation of irrigation system, animal shearing and livestock services (other than veterinary services), nursery and horticultural services, soil conservation services, soil desalination services, harvesting, threshing, land clearance, land draining services.
Article 11. MINING
Sector: Mining
Sub-Sector: Mining covering exploration and mining of diamonds and precious Stones; gold, and silver.
Industrial Classification: NIC 133 (Mining of precious/semi-precious metal ores), NIC 156 (Mining of precious/semi-precious stones)
Type of Reservation: National Treatment (Article 10.3), Performance Requirement (Article 10.5)
Description:
FDI up to100% is permitted subject to the provisions of the Mines and Minerals (Development & Regulation) Act, 1957. Also subject to the condition that in the event the foreign investor is establishing a 100% subsidiary, it shall submit a declaration to the effect that it has no existing joint venture for the same area or for a particular mineral
Reservation Measure:
Mines and Minerals (Development & Regulation) Act 1957 and tules, regulations, notifications, policies, directives, guidelines and circulars made thereunder.
Industries (Development and Regulation) Act, 1951 and policies, tules, regulations, notifications, circulars, guidelines, press notes, made thereunder.
Government policy vide Press Note 4 (2006) and Press Note 7 (2008).
Article 12. MINING AND QUARRYING
Sector: Mining and Quarrying
Sub-Sector: Mining of coal and lignite, extraction of peat
Industrial Classification: NIC-10
Type of Reservation: Performance Requirement (Article 10.5)
Description:
FDI up to 100% under automatic route is allowed for mining of coal and lignite for captive consumption by: (i) power projects, (ii) iron and steel, (iii) cement production and (iv) other eligible activities permitted under Coal Mines (Nationalization) Act, 1973 and Rules, Regulations, notifications, policies, directives, guidelines and circulars made thereunder. FDI is not allowed for coal mining for any other activities.
Reservation Measure:
Mines and Minerals (Development & Regulation) Act 1957 and tules, regulations, notifications, policies, directives, guidelines and circulars made thereunder.
Coal Mines (Nationalization) Act, 1973 - Section 3
Article 13.
Sector: Mining and Quarrying
Sub-Sector: Mining of uranium and thorium ores
Industrial Classification: NIC- 14
Type of Reservation: National Treatment (Article 10.3) Performance Requirement (Article 10.5), Senior Management and Boards of Directors (Article 10.6)
Description:
Uranium and Thorium ores are "atomic minerals" under Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act)
Under the provisions of the Mines and Minerals (Development and Regulation)Act, 1957, the reconnaissance or prospecting or mining operations can be undertaken only pursuant to a licence and consequent lease and no person shall undertake any reconnaissance, prospecting or mining operations in any area, except under and in accordance with the terms and conditions of reconnaissance permit or of a prospecting license or, as the case may be, a mining lease, granted under MMDR Act and the rules made thereunder.
Government shall not grant reconnaissance permit, prospecting licence or mining lease to any person unless such person
a. is an Indian national, or a Company as defined in sub- section (1) of Section 3 of the Companies Act, 1956; and b. satisfies such conditions as may be prescribed :
Provided that in respect of any mineral specified in the First Schedule of MMDR Act, 1957, no prospecting licence or mining lease shall be granted except with the previous approvals of the Central Government.
Explanation - For the purposes of this sub-section, a person shall be deemed to be an Indian national, -
a. in the case of a firm or other association of individuals, only if all the members of the firm or members of the association are citizens of India; and
b. in the case of an individual, only if he is a citizen of India
A State Government may either with the previous approval of the Central Government or at the instance of the Central Government impose such further conditions as may be necessary in the interests of mineral development, including development of atomic minerals (Mineral Concession Rules 1960)
Reservation Measure:
Mines and Minerals (Development & Regulation) Act 1957 (No.67 of 1957), Mineral Concession Rules, 1960, and other policies, rules, regulations, made thereunder.
Atomic Energy Act, 1962 and policies, rules , regulations, orders issued thereunder.
Article 14.
Sector: Mining and Quarrying
Sub-Sector: Mining of iron ores, Mining of metal ores, Mining of non- metallic minerals (other than Petroleum and natural gas)
Industrial Classification: NIC- 12(Mining of Iron Ores) NIC-13 (Mining of metal ores other than iron ores), NIC-15 (Mining of non-metallic minerals not elsewhere classified)
Type of Reservation: National Treatment (Article 10.3), Performance Requirements (Article 10.5)
Description:
FDI up to 100% is permitted on the automatic route in mining of non-atomic and non-fuel minerals subject to applicable laws and regulations including the Mines and Minerals (Development and Regulations) Act, 1957.
Under the provisions of the Mines and Minerals (Development and Regulation) Act, 1957, the reconnaissance or prospecting or mining operations can be undertaken only pursuant to a licence and consequent lease and no person shall undertake any reconnaissance, prospecting or mining operations in any area, except under and in accordance with the terms and conditions of reconnaissance permit or of a prospecting license or, as the case may be, a mining lease, granted under MMDR Act and the rules made thereunder.
Government shall not grant reconnaissance permit, prospecting licence or mining lease to any person unless such person -
a. is an Indian national, or a Company as defined in sub-section (1) of Section 3 of the Companies Act, 1956; and
b. satisfies such conditions as may be prescribed :
Provided that in respect of any mineral specified in the First Schedule, no prospecting licence or mining lease shall be granted except with the previous approvals of the Central Government.
Explanation - For the purposes of this sub-section, a person shall be deemed to be an Indian national, -
(a) in the case of a firm or other association of individuals, only if all the members of the firm or members of the association are citizens of India; and
(b) in the case of an individual, only if he is a citizen of India
A State Government may either with the previous approval of the Central Government or at the instance of the Central Government impose such further conditions as may be necessary in the interests of mineral development, including development of atomic minerals (Mineral Concession Rules 1960)
The holder of a mining lease granted shall pay royalty in respect of any mineral removed or consumed by him or by his agent, manager, employee, contractor or sub-lessee from the leased area after such commencement, at the rate for the time being specified.
Reservation Measure:
Mines and Minerals (Development & Regulation) Act -
Section 5 and Section 9
Article 15.
Sector: Other Mining and Quarrying
Sub-Sector: Quarrying of stone, sand and clay
Industrial Classification: NIC 150
Type of Reservation: National Treatment (Article 10.3), Performance Requirement (Article 10.5)
Description:
These are categorized as Minor Minerals under Section 3 of the Mines and Minerals (Development & Regulation) Act. The State Governments have the powers to regulate operations of mining of minor minerals.
Reservation Measure:
Mines and Minerals (Development & Regulation) Act 1957 (No.67 of 1957)
Mineral Concession Rules, 1960
Article 16.
Sector: Titanium bearing minerals and ores.
Sub-Sector: Mining and production of Titanium ores (ILmenite, Rutile, and Leucoxene) and Zirconium minerals (Zircon)
Industrial Classification: NIC-136
Type of Reservation: National Treatment (Article 10.3), Performance Requirement (Article 10.5)
Description:
FDI up to 100% is allowed with prior government approval in mining and mineral separation of titanium bearing minerals and ores, its value addition and integrated activities, subject to sectoral regulations and Mines and Minerals (Development and Regulation) Act, 1957. The separation of titanium bearing minerals and ores will be subject to the following additional conditions
(i) value addition facilities are set up within India along with transfer of technology;
(ii) disposal of tailings during the mineral separation shall be carried out in accordance with regulations framed by the Atomic Energy Regulatory Board such as Atomic Energy (Radiation Protection)Rules 2004; Atomic Energy (Safe Disposal of Radioactive Wastes)Rules, 1987
No FDI is permitted in mining of prescribed substances as notified by the Department of Atomic Energy, under the Atomic Energy Act, 1962.
Under the provisions of the Mines and Minerals (Development and Regulation) Act, 1957, the reconnaissance or prospecting or mining operations can be undertaken only pursuant to a license and consequent lease and no person shall undertake any reconnaissance, prospecting or mining operations in any area, except under and in accordance with the terms and conditions of reconnaissance permit or of a prospecting license or, as the case may be, a mining lease, granted under MMDR Act and the rules made thereunder.
Government shall not grant reconnaissance permit, prospecting licence or mining lease to any person unless such person -
(a) is an Indian national, or a Company as defined in sub- section (1) of Section 3 of the Companies Act, 1956; and
(b) satisfies such conditions as may be prescribed :
Provided that in respect of any mineral specified in the First Schedule, no prospecting licence or mining lease shall be granted except with the previous approvals of the Central Government.
Explanation - For the purposes of this sub-section, a person shall be deemed to be an Indian national, -
(a) in the case of a firm or other association of individuals, only if all the members of the firm or members of the association are citizens of India; and
(b) in the case of an individual, only if he is a citizen of India
A State Government may either with the previous approval of the Central Government or at the instance of the Central Government impose such further conditions as may be necessary in the interests of mineral development, including development of atomic minerals (Mineral Concession Rules 1960)
The holder of a mining lease granted shall pay royalty in respect of any mineral removed or consumed by him or by his agent, manager, employee, contractor or sub-lessee from the leased area after such commencement, at the rate for the time being specified.
Reservation Measure:
Article 73 of the Constitution of India read with Article 246 of the Constitution of India.
Government Policy on Exploitation of Beach Sand minerals notified vide Government of India Resolution No. 8/1(1)/97- PSU/1422 dated 6-10-1998
Government Notification $.0.61(E) dated 18.1.2006 re-notifying the list of prescribed substances under the Atomic Energy Act, 1962, excluding Titanium bearing ores and concentrates, and Zirconium, its alloys and compounds and minerals/ concentrates
including Zircon from the list of prescribed substances.
Industries (Development and Regulation)Act, 1951.
Mines and Minerals (Development and Regulation) Act, 1957
Atomic Energy (Radiation Protection)Rules 2004
Atomic Energy (Safe Disposal of Radioactive Wastes)Rules, 1987.
Press Note 6(2008) and Press Note 7 (2008)
Article 17. MANUFACTURING
Sector: Defence Industry
Sub-Sector
Industrial Classification
Type of Reservation: National Treatment (Article 10.3), Performance Requirement (Article 10.5), Senior Management and Boards of Directors (Article 10.6)
Description:
FDI in Defence Industry (manufacturing) Sector is subject to licencing under the Industries (Development & Regulation)Act, 1951 and also subject to following limitations:
a. non-resident equity cannot exceed 26%
b. There is a three year lock in period for transfer of equity from one foreign investor to another foreign investor (including NRIs and OCBs with 60% of more NRI stake) and such transfer would be subject to prior approval of the Foreign Investment Promotion Board (FIPB) and the Government.
c. FDI shall be subject to policies made by the Government under the Industries (Development and Regulation) Act, 1951 from time to time
d. Treatment of Indian companies having FDI in terms of procurement of products shall be governed by the rules and procedure regulating procurement by defence services as may be issued or modified from time to time by Ministry of Defense, Government of India
e. FDI approval will be given by FIPB in consultation with Ministry of Defense
f. Licenses will be given to Indian companies/partnership firms given by the Department of Industrial Policy and promotion in consultation with Ministry of Defense
g. The applicant should be an Indian company/partnership firm.
h. The management of the applicant company / partnership should be in Indian hands with majority representation on the Board as well as the Chief Executive of the company / partnership firm being resident Indians.
i. Full particulars of the Directors and the Chief Executives should be furnished along with the applications.
j. The Government reserves the right to verify the antecedents of the foreign collaborators and domestic promoters including their financial standing and credentials in the world market. Preference would be given to original equipment manufacturers or design establishments, and companies having a good track record of past supplies to Armed Forces, Space and Atomic energy sectors and having an established R & D base.
k. No minimum capitalization for FDI purposes
l. The standards and testing procedures for equipment to be produced under license from foreign collaborators or from indigenous R & D will have to be provided by the licensee to the Government nominated quality assurance agency under appropriate confidentiality clause.
m. The licensing authority would satisfy itself about the adequacy of the networth of the foreign investor, taking into account the category of weapons and equipment that are proposed to be manufactured
n. Capacity norms for production will be provided in the license based on the application as well as the recommendations of the Ministry of Defense, which will look into existing capacities of similar or allied products
o. Purchase preference and price preference may be given to the Public Sector organizations as per guidelines of the Department of Public Enterprises.
p. Arms and ammunition produced by the private manufacturers will be primarily sold to the Ministry of Defence. These items may also be sold to other Government entities under the control of Ministry of Home Affairs and State Government with the prior approval of Ministry of Defense. No such item shall be sold within the country to any person or entity. The export of manufactured items will be subject to guidelines as applicable to ordinance factories and defense public sector undertakings. Non- lethal items will be permitted for sale to person/entities other than the Central or state government with the prior approval of Ministry of Defense.
Reservation Measure:
Reservation Industries (Development & Regulations)Act, 1951- Section 11 Measure and First Schedule to the Act.
Arms Act- Section 2(b) and 2(c) on definition of arms and ammunition.
Government Policy - Press Note 4 (2001) and Press Note 2(2002)
Article 18.
Sector: Refining of Petroleum
Sub-Sector
Industrial Classification
Type of Reservation: National Treatment (Article 10.3) Performance Requirement (Article 10.5), Senior Management and Boards of Directors (Article 10.6)
Description:
FDI up to 49% is allowed with prior approval of Foreign Investment Promotion Board (FIPB) in Public Sector Undertakings in the Petroleum refining sector. No divestment or dilution of domestic equity in the existing PSUs is allowed.
FDI up to 100% is permitted on the automatic route in Private companies engaged in petroleum refining.
Petroleum refining is subject to the sectoral policy relating to petroleum and natural gas notified by the Government of India.
Reservation Measure: