In order to streamline the foreign investment regime, the Department of Industrial Policy and Promotion (DIPP) has proposed to introduce a composite cap which will include FDI, FII and other instruments in various sectors including agriculture, tea, mining, broadcasting, media and banking among others. The DIPP, in its draft cabinet note, has noted that under the present structure, a change in the FII/FPI investments can lead to change in control and ownership of a company.
Seeking to bring clarity in overseas investments norms, the DIPP has stated that the proposal if accepted by Union Cabinet would help in improving ease of doing business in India. The move would help in removing ambiguity on application of sectoral caps, conditional ties and approval requirements in different sectors and bring simplification in the foreign investment policy.
Further, the proposal would also provide Indian firms and investors an option of category of investments between FDI, FPI (FII, Qualified Foreign Investors), NRI and Foreign Venture Capital Investor. FDI into the country increased by 8 percent to $24.29 in the FY14 form $22.42 billion recorded in the FY13.