Foreign direct investment in India: Ahead of the World Economic Forum later this month, the government on Wednesday decided to permit 100 per cent FDI through the automatic route in single brand retail.

It also allowed FIIs/FPIs to invest in power exchanges through the primary market and approved foreign airlines investing up to 49 per cent under the ‘approval route’ in Air India. These changes were announced after a Union Cabinet chaired by Prime Minister Narendra Modi today.

Until now, FDI up to 49 per cent was permitted under the automatic route but beyond that limit, the government’s nod was required. Also, until now, 49 per cent FDI was permitted under the automatic route in power exchanges registered under the Central Electricity Regulatory Commission (Power Market) Regulations, 2010. However, FII/FPI purchases were restricted to secondary market only.

The government made clear that real-estate broking services aren’t considered real estate business and therefore the sector is eligible for 100 per cent FDI under automatic route.