The cabinet also allowed foreign airlines to invest up to 49 percent in the debt-ridden national carrier Air India, subject to government approval.
The Cabinet also allowed foreign institutional and portfolio investors to invest in power exchanges and relaxed FDI policy for medical devices and audit firms associated with companies receiving overseas funds.
Opposing the disinvestment of Air India, Mahajan said the finances of national airline are in deep trouble, but allowing foreign investment is not the best of the solutions for ending its troubles. Foreign investment is a major driver of economic growth and a source of non-debt finance for the economic development of the country. These are meant to liberalize and simplify the FDI policy so as to provide ease of doing business in the country. Foreign single-brand retail companies can set up operations without any time lag, thanks to the nod for 100% FDI under the automatic route.
Opening up of FDI for real estate brokers will surely help the sector in India.
In construction sector, the Government clarified that real-estate broking service eligible for 100% FDI under automatic route. 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.
The decisions came ahead of Modis participation in World Economic Forum at Davos this month where he is likely to hard sell India as an attractive investment destination.
For single brand retail trading, there is no approval required of the Government for 100% FDI. The investment of 49% can be either direct or indirect, and the loans of Air India are around 48877 Crores, with 17360 crore aircraft loans and capital loans of 31517 crores.
NEW DELHI-India moved to relax restrictions on foreign investment in retail, airlines and other industries Wednesday, in hopes of attracting more capital and expertise to Asia's third-largest economy.
This is the second time that the FDI policy has been changed by the current government.
The move should generate employment and give Indian consumers access to several global brands.
Earlier the applications were processed by the Ministry of Home Affairs.