RBI notifies definition of 'control' in context of FDI

MUMBAI: The Reserve Bank today notified the definition of term 'control' in relation to foreign direct investment and revised the list of states where FDI is permitted in multi-brand retail.

"'Control' shall include the right to appoint a majority of the directors or to control the management or policy decisions including by virtue of their shareholding or management rights or shareholders agreements or voting agreements," the Reserve Bank said.

It further said that as Himachal Pradesh and Karnataka have given consent to implement the FDI policy on multi-brand retail trading, "as such, the list of States/Union Territories which have conveyed their concurrence stands modified".

The number of states and Union Territories which have given consent to implement the FDI policy on multi-brand retail has increased to 12.

The central bank further said in order to bring uniformity in the sectoral classification position for FDI has been suitably revised.

The government recently relaxed norms for multi-brand retail trading and eased the mandatory 30 per cent local sourcing norms for companies.

FDI in insurance has been kept at 26 per cent as the bill to raise the limit to 49 per cent is pending in the Rajya Sabha.

The cap in telecom was increased to 100 per cent from 74 per cent. FDI of up to 49 per cent can come through the automatic route.

The Department of Industrial Policy and Promotion (DIPP) formulates FDI policy.