More sectors open to 100 per cent FDI
New Delhi: In a major decision taken by the government, 100 per cent foreign direct investment has been allowed in the drugs and pharmaceuticals, airports, hotels and tourism, mass rapid transport systems, development of townships and courier services sectors.

In addition to this the government has also allowed 49 per cent FDI in banking, 74 per cent in ISPs, paging and end-to-end bandwidth, and 26 per cent in the hitherto sensitive defence production which has been opened up to domestic private players.

To add icing to the cake, the government has also waived the stipulation for foreign investors to compulsorily divest 26 per cent stake to Indian partners in the pharmaceutical and hotel and tourism sectors. For the pharma sector, barring investment in drugs under DNA technology, the foreign investment can come in through the automatic route.

Private sector banks, which earlier could have only 20 per cent foreign equity, would welcome the hike in foreign investment to 49 per cent.
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