| Commerce minister Kamal Nath in New Delhi on Monday. (Reuters)
New Delhi, Nov. 26: The government is likely to ease foreign direct investment norms (FDI) for petroleum refining, commodity exchanges and aviation services later this week.
However, the contentious issue of opening up retail is unlikely to be considered during the meeting because of stiff opposition from several quarters, including the Left.
At present, 100 per cent FDI in wholesale cash-and-carry business and 51 per cent in single-brand retail is allowed. Multi-brand retailers can, however, set up shop through franchisees.
“Apart from the FDI review, the comprehensive economic cooperation agreement with Singapore will also come up before the cabinet, which will meet this Thursday,” Union commerce minister Kamal Nath told reporters here today.
The review of the FDI policy is aimed at streamlining investment procedures in a comprehensive way, giving preference to sectors that generate more economic activity and jobs, Nath added.
Top officials said the government would be looking at raising foreign direct investment in air cargo, sea-planes, charter airlines and helicopter businesses to 74 per cent from 49 per cent. The sectoral cap of 49 per cent holds true for most aviation sectors.
Civil aviation minister Praful Patel has made it clear that he wants FDI rules for non-passenger airline businesses to be relaxed but does not want any major changes in the norms for airline FDI.
The rules not only bar majority foreign ownership of scheduled passenger airlines in India but also stops foreign airlines from directly or indirectly owning stakes in local entities.
Similarly, there is a move to hike FDI in commodity exchanges. At present, for stock exchanges a 49 per cent cap exists, which also has a clause that not more than 5 per cent stake is held by any single foreign investor, direct or portfolio, and this is likely to be the role model for commodity exchanges too.
In petroleum, the government could allow foreign players to take up to 49 per cent stake in new projects with state-run oil firms. They are now limited to 26 per cent.