New Delhi: The union cabinet gave its nod for further liberalizing foreign direct investment (FDI) norms in four sectors as part of the government's efforts to get economic growth back on track.
The new norms approved by the cabinet will allow foreign investment in digital media up to 26 per cent stake.
The cabinet also allowed 100 per cent foreign investment in coal mining and contract manufacturing. FDI was so far only allowed in coal mines allotted for captive use, or for use by the companies themselves.
The easing of FDI norms in coal mining will be a boost to PeaBody, Glencore and BHP Group, Reuters reported.
Likewise, easing of FDI norms in single-brand retail firms, especially the permission to set up brick-and-mortar stores would help firms like Apple.
Apple does not operate retail stores in India and hence this would enable it to start selling products online, though it would need to set up offline stores within two years.
Briefing reporters on the decisions taken by the union cabinet, Commerce and Industry Minister Piyush Goyal said the government hopes that liberalising FDI norms will boost economic growth.
On FDI in single brand retailing, the Cabinet has expanded the definition of mandatory 30 per cent domestic sourcing norm.
Now, single-brand retail chains with more than 51 per cent FDI have to source 30 per cent of its goods from India. With new norms, companies can also include local sourcing for their exports. These exports can be direct, from a group company or even from a third party firm working for it on contract.
The move comes two days after the Reserve Bank of India's board gave its nod to transfer Rs 1.76 lakh crore of its surplus to the government, which is expected to infuse it to the economy as a fiscal stimulus to boost growth.
The opposition Congress slammed the Modi government's move to transfer the RBI's surplus to the state exchequer.
Congress leader Rahul Gandhi said the move amounted to stealing from the central bank, triggering a row.
The government rubbished the opposition charges as outlandish.
The Modi government's line of thinking is that lack of investment was key to the relatively sluggish Gross Domestic Product growth of 5.8 per cent in the Jan-March quarter of the fiscal 2020.
Data for the April-June quarter, slated to be released Friday, is also expected to be sluggish.
This is the prime trigger for the government to ease the FDI norms.