Regulations for Foreign Company Investments

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The Regulations for Foreign Company Investments (FCI) are established to control the flow of foreign investments in different sectors in the Indian economy. The limits to FCI vary in different sectors with the aim of maintaining a proper balance between domestic and foreign investments. Approval to FCI is of two types - approvals by government and automatic approval.


The Regulations for Foreign Company Investments control the inflow of investments in India made by foreign companies.

These regulations are formulated under the Foreign Direct Investment (FDI) policy by the Foreign Investment Promotion Broad. The FDI policies in India are primarily development oriented, seeking to maximize the economic growth while maintaining a proper balance of domestic and foreign investments. These regulations allow approval of Foreign Company Investments by means of automatic route, as suggested by the Reserve Bank of India (RBI) or approval route, which requires confirmation from the Government of India.

The Regulations for Foreign Company Investments allow two types of approvals for FCI. These are -

FCI allowed through governmental approval:

Foreign Company Investments are allowed up to 26% in-
  • FM Radio Broadcasting
  • Print media such as publishing newspaper and periodicals dealing with news and current affairs
  • Defense industries
  • Insurance
A maximum of 49% FCI is allowed in -Broadcasting

  • Establish hardware facilities like up-linking, HUB, etc
  • Cable network
  • Direct To Home T.V. Transmission
  • Domestic airlines
  • Telecommunication services (basic and cellular services)
  • Investing companies in infrastructure/service sector
FCI is allowed up to 74% for-
  • Development of Airports
  • Internet Service Protocol including gateways, End-to-End Bandwidth, Radio-paging
  • Atomic minerals
  • Private sector banking
  • Establishment and operation of satellites
  • Exploration and mining of coal
  • Diamonds and other precious stones mining
100% FCI is allowed in the following sectors -
  • Development of Airports
  • Domestic airlines
  • Investment and Financing in Petroleum sector, Development of Pipelines for natural gas and liquefied petroleum gas
  • Wholesale Cash Trading, Exports, Trading of advanced technological equipments
  • Courier services
  • Tea Sector, including tea plantation
  • Non Banking Finance Companies

FCI allowed under automatic route:

FCI is allowed up to 100% under automatic route for the following sectors -

  • Pharmaceuticals
  • Pollution control and management
  • Manufacturing sector
  • Non-banking financial services
  • Software development
  • Food processing
  • Electronic hardware
  • Hospitals
  • Film industry
  • Advertising
  • Petroleum Pipeline
  • Private oil refineries
  • Exploration and mining of minerals (diamonds and precious stones excluded)
  • Management consultancy
  • Venture capital funds/companies
  • Development of industrial park, model township, SEZ
In the Infrastructure sector, FCI is allowed up to 100% under automatic route in -
  • Electricity Generation (Atomic energy excluded)
  • Electricity Transmission
  • Mass Rapid Transport System
  • Electricity Distribution
  • Ports and Harbors
  • Roads and Highways
  • Vehicular Bridges
  • Hotel and Tourism

Prohibited Sectors

Regulations for Foreign Company Investments have specified certain sectors where FCI cannot be undertaken either through government approvals or through automatic approvals. FCI is prohibited in the sectors of -
  • Atomic energy
  • Retail Business
  • Lottery Business
  • Gambling and betting sector
  • Housing and Real Estate sector apart from the development of townships
Last Updated on 05/07/2011