Addressing a press briefing in Delhi, Commerce and Industry Minister Piyush Goyal and Information & Broadcasting Minister Prakash Javadekar on Wednesday anunced key decisions taken in Cabinet meeting held immediately prior. Goyal contended that re was a slowdown of Foreign Direct Investment (FDI) worldwide, which had led to government easing FDI rms. Essentially, government has approved 100% FDI in coal mining and all related processing activities and contract manufacturing under automatic route. It has also paved way for 26% FDI in digital media. This comes days after Finance Minister Nirmala Sitharaman anunced a slew of initiatives and amendments to current protocol and policy to buttress PM Modi's Independence day statement that his was a government that respects wealth creators as 'wealth of nation'. 

impetus to multiple sectors

Cabinet's decisions have impacted single-brand retail sector too. earlier rule that mandated online retailing only after opening a physical store has been relaxed. Additionally, compulsory 30% local sourcing requirement has been done away with. procurement policy was opposed by many foreign retailers. Currently, y are allowed to adjust procurement of goods from India for ir global operations for meeting mandatory local sourcing requirement. 

Read: Union Budget 2019: Finance Minister Nirmala Sitharaman Proposes Opening Up FDI In Single-brand Retail, Aviation, Media And Animation; 100% FDI For Insurance Intermediaries

Allowing 100% FDI in coal mining will allow foreign entities to own and sell coal mines in India. Previously, 100% FDI was permitted only in captive coal mining. Similarly, mention of contract manufacturing is significant. While 100% FDI was prevalent in manufacturing sector under automatic route, re was ambiguity about contract manufacturing as it was t defined as such. Goyal asserted that se changes would give a big boost to FDI and Make in India programme. According to him, this would help companies looking for alternate manufacturing hubs. This, in turn, could create a large number of jobs for people in India.

Read: Indian Railway: Soon, Stream Free Movies & TV Shows On Your Train Journeys; Piyush Goyal Says You'll Love It

Early hints

se reforms come at a juncture when FDI equity inflows have declined for first time in 6 years. y have fallen from $44.8 billion to $44.4 billion in 2018-19. Finance Minister Nirmala Sitharaman, in her Budget speech in July, had hinted at government exploring suggestions to open up FDI in aviation, media and insurance sectors. re were also speculations about FDI reforms in or sectors like gaming, information utilities, and animation. In early 2019, Commerce and Industry Minister Piyush Goyal had said that government could initiate changes which could enable foreign investors in single-brand retail to circumvent compulsory 30% local sourcing requirement. 

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