The decision was taken by the Cabinet at its meeting chaired by Prime Minister, Parliamentary Affairs Minister P R Dasmunshi told reporters here.

The Cabinet also relaxed FDI norms in areas like commodity exchanges and credit information. The FDI review, aimed at streamlining the process and opening up labour-intensive sectors, has been due for long.

However, the Cabinet while reviewing FDI norms in various sectors it did not make any change in the controversial retail sector.  Under present dispensation, 51 per cent FDI is allowed in single brand retail, while none is allowed in multi-brand.

Significantly relaxing FDI norms in the sensitive civil aviation sector, the Cabinet allowed FDI up to 100 per cent on automatic route for maintenance and repair organisations, flying training institutes, helicopter and seaplane services.

Automatic route

It also allowed 74 per cent on automatic route for non scheduled airlines, chartered airlines and cargo airlines. In these areas NRI investment up to 100 per cent would be allowed on automatic route. But there will be no direct or indirect participation by foreign airlines in non-scheduled airlines and chartered airlines.

However, there will be no change in existing FDI cap at 49 per cent on automatic route and 100 per cent for NRI in domestic scheduled passenger airline sector with no direct or indirect participation by foreign airlines.
In the crucial sector of petroleum and natural gas the new policy has done away with compulsory divestment of 26 per cent equity by foreign companies in fuel and gas trading ventures.

Till now 100 per cent FDI was allowed through automatic route on the condition that 26 per cent equity in such ventures be divested in favour of an Indian partner within five years.  The government also raised FDI in public sector refineries to 49 per cent from current 26 per cent.

Opening up Commodity Exchanges to foreign investment the government allowed FDI up to 26 per cent and Foreign Institutional Investment (FII) up to 23 per cent. However, no single investor would be allowed to more than 5 per cent of stake. 

The government allowed foreign investment up to 49 per cent in Credit Information Companies (CICs). The permission of Reserve Bank of India will be required for Foreign Direct Investment in credit information firms.

Foreign Institutional Investment  will be permitted up to 24 per cent only in CICs listed at stock exchanges within overall limit of 49 per cent for foreign investment.

The Centre has allowed up to 100 per in the mining of titanium bearing minerals. This is subject to setting up of value addition facilities within India along with transfer of technology.