The Group of Ministers (GoM), headed by agriculture minister Sharad Pawar decided to allow 100% FDI in mining and exploration of diamonds and precious stones through the automatic route. The GoM constituted by the Indian government in early December, put forward its recommendations OM January 25, 2006.
The FDI cap for the sector stood at 74% previously. The move is expected to facilitate the induction of modern mining technologies and may eventually reduce the dependence on imported rough. The Indian government has also decided to allow FDI in retail outlets meant exclusively for ‘single brands.
The move will encourage the multinational giants to invest in Indian outlets meant for premium brands like Chanel, Louis Vuitton or Gucci. “Foreign companies will be allowed to invest up to 51% in joint ventures meant for setting up such outlets,†said Kamal Nath, Union Commerce and Industry Minister after a Cabinet meeting chaired by prime minister Manmohan Singh.
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