In a bid to boost foreign investments, the Union Cabinet on Wednesday decided to offer 10 years of Permanent Residency Status (PRS) to foreigners except from Pakistan and China. This will be renewed for another 10 years, if there is no adverse opinion from security and intelligence agencies about the PRS holder.
The Cabinet also gave approval to the “radical” changes in the foreign direct investment regime that had sought to increase FDI to 100 per cent in defence and liberalised the policy for several other sectors.
“The PRS will be granted for a period of 10 years with multiple entry. This can be reviewed for another 10 years if the PRS holder has not come to adverse notice. The scheme will be applicable only to foreign investors fulfilling the prescribed eligibility conditions, his/her spouse and dependents. In order to avail this scheme, the foreign investor will have to invest a minimum of Rs10 crore to be brought within 18 months or Rs25 crore to be brought within 36 months. Further, the foreign investment should result in generating employment to at least 20 resident Indians every financial year,” said a government statement.
Investors would also be allowed to buy one residential property and their spouses and children can work or study here. “A certain threshold if you invest in India, then the availability of visa, the availability of the right to purchase assets, the availability of employment for family members, there is a detailed policy that has been approved by the Cabinet today,” Finance Minister Arun Jaitley said after the meeting.
The scheme is expected to encourage foreign investment in India and facilitate Make in India Programme. Under the Scheme, suitable provisions will be incorporated in the Visa Manual to provide for the grant of PRS to foreign investors.
Cabinet also approved simplification and liberalization in Defence, Broadcasting, Food products, Pharmaceutical, Civil Aviation, Private Security Agencies and Single Retail Branding sectors.
“The FDI policy amendments are meant for liberalising and simplifying the FDI policy so as to provide ease of doing business in the country, leading to larger FDI inflows contributing to growth of investment, incomes and employment,” said the statement.
As per the liberalised norms, foreign investment in defence sector is now permitted up to 100 per cent.
Earlier policy permitted 49 per cent FDI participation in the equity of a company under automatic route. FDI above 49 per cent was permitted through approval on case to case basis, wherever it is likely to result in access to modern and ‘state-of-art’ technology in the country.
With a view to aid in modernisation of the existing airports to establish a high standard and help ease pressure on the existing airports, 100 per cent FDI under automatic route has been allowed in brownfield airport projects.
In case of single brand retail trading, the government has relaxed local sourcing norms for up to three years, with prior government approval, for entities undertaking trading of products having ‘stateofart’ and
‘cutting edge’ technology. For private security agencies,
FDI up to 49 per cent is now permitted under automatic route and beyond that and up to 74 per cent, Government approval is required.