Under the existing provisions, issued in 1998, projects for electricity generation, transmission and distribution with foreign equity up to 100 per cent are eligible for automatic approval provided foreign equity in any such projects does not exceed Rs 1,500 crore.

Hydroelectric, coal and lignite based, oil based and gas based power plants are qualified for automatic approval.

However, atomic reactor power plants are not covered by this change of norms.

The Government has also decided to increase the level of FDI in oil refining sector under automatic route from existing 49 per cent to 100 per cent.

Under existing guidelines for petroleum sector, FDI in refining is permitted up to 26 per cent (public sector holding of 26 per cent and balance of 48 per cent by public). In the case of private Indian companies, FDI in refining was permitted up to 49 per cent.

FDI up to 100 per cent is now allowed for e-commerce activities, subject to the condition that such companies will divest 26 per cent of their equity in favour of Indian public in five years, if these companies are listed in other parts of the world.

These companies will engage only in business to business (B2B) e-commerce and not in retail trading, implying that existing restrictions on FDI in domestic trading will be applicable to e-commerce as well.

The Government has also decided to remove the condition of dividend balancing on the 22 specified consumer goods sector.

In 1992, it was decided to withdraw the condition of dividend balancing in all foreign investment approvals except for industries in these 22 consumer goods sector.

UNI