The government has issued Press Note 7 consolidating the policy and regulations governing Foreign Direct Investment in India, including the policy review undertaken in January.

FDI into India is regulated through "press notes" that publicly state the government's position on FDI policy. A summary of the FDI policy and regulations applicable in various sectors after incorporating changes in the policy as on March 31, 2008 are included in Press Note 7 (2008), a PIB release said.

After reviewing of the FDI policy in 2005-06, the summary was notified in Press Note 4 (2006), followed by Press Note 5 (2006) and Press Note 2 (2007) and 3 (2007) incorporating further policy revisions.

The policy was again reviewed early this year when FDI norms for sectors like aviation, commodity exchanges, petroleum, credit information bureau, industrial parks and titanium mining were relaxed. These policy measures were notified in Press Note 1-6 (2008).

The release added that prior government approval for FDI is required where more than 24 percent foreign equity is proposed to be inducted for manufacturing items reserved for the Small Scale sector.

The Press Note lists sectors such as retail, (except single brand retailing), atomic energy, lottery, gambling and betting, business of chit fund and trading in Transferable Development Rights (TDRs) where foreign investment is not permitted.

It also specifies conditions like FDI limit and criteria for foreign firms to invest in domestic sectors like power, banking, agriculture, manufacturing, retail, broadcasting and non-banking finance companies.

Sectors prohibited for FDI:

• Retail Trading (except single brand product retailing)
• Atomic Energy
• Lottery Business
• Gambling and Betting
• Business of chit fund
• Nidhi Company
• Trading in Transferable Development Rights (TDRs)
• Activity/sector not opened to private sector investment