"It has now been chose to permit 100 percent FDI under automatic route", an official release said here, following a Cabinet meeting.
Foreign airlines can now own up to 49% stake in national carrier Air India, with the Cabinet clearing a proposal in this regard today. "Is your government giving nation to Foreigners????" "Further, allowing incremental sourcing undertaken by overseas group companies to be counted towards the 30 per cent sourcing commitment for the initial five years will provide the single brand retail trading companies the flexibility and time to align their retail and sourcing business", said Goldie Dhama, Partner - Regulatory, PwC India.
Civil Aviation Minister Ashok Gajapathi Raju told PTI that permitting 49 per cent foreign direct investment in Air India brings the airline at par with other domestic carriers and does away with the preferential treatment that was extended to the national carrier.
Senior Congress leader Anand Sharma said that 100 per cent FDI in single brand retail was notified during the previous UPA government and the only change made is to allow it through the automatic route. "However, FII/FPI purchases were restricted to secondary market only".
The Congress and the CPI-M slammed the government move on Air India, saying it would only lead to the national carrier going into the hands of a foreign airline.
Until now, Foreign Direct Investment up to 49 per cent was permitted under the automatic route.
This is the second major opening in the FDI sector after the government lifted the cap from over a dozen sectors in 2016.
"The move is expected to pour-in funds from all over the globe, fuelling the rapid development of the sector in India".
PN Vijay, a market analyst, said the decision was "not good enough".
"Innovation and expertise in association with FDI will help in reducing the costs that will increase the welfare of both consumer as well as the seller, going ahead", he added.
Accordingly, if the above activities are regulated by any financial sector regulator, then foreign investment up to 100 per cent under automatic route shall be allowed; and, if they are not regulated by any financial sector regulator or where only part is regulated or where there is doubt regarding the regulatory oversight, foreign investment up to 100 per cent will be allowed under government approval route, subject to conditions, including minimum capitalisation requirement, as may be decided by the government.
However, Ananda Sharma termed the FDI in retail "a cosmetic change" and "minor tweak".
Both Congress and the CPI-M reminded the BJP that it had opposed the entry of foreign companies into retail trade earlier and it has now "hypocritically reversed its position".
After taking power with the biggest mandate in three decades, the Bharatiya Janata Party has wrestled with opposition parties that have blocked a Bill to make it easier to acquire land for factories.
Prime Minister Narendra Modi has harmed the manufacturing sector and traders, Surjewala alleged.