Foreign direct investments in India are approved through two routes 1.

AUTOMATIC APPROVAL BY RBI: Processing time:2 weeks Approach: Permits foreign equity up to 24%;50%; 51%; 74% and 100% is allowed depending on the category of industries. The lists are comprehensive and cover most industries of interest to foreign companies. Investments in high-priority industries or for trading companies primarily engaged in exporting 2. THE FIPB ROUTE PROCESSING OF NON-AUTOMATIC APPROVAL CASES: FIPB stands for Foreign Investment Promotion Board which approves all other cases where the parameters of automatic approval are not met. Processing time is 4 to 6weeks. Approach: liberal for all sectors and rejections are few. Not necessary for foreign investors to have a local partner. The portion of the equity not proposed to be held by the foreign investor can be offered to the public.

Sector-wise FDI limit in India 1. Private Sector BankingNon-Banking Financial Companies (NBFC) 49%100%
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2. Insurance 26% 3. Telecommunications 49% 4. Petroleum Refining (Private Sector)Petroleum Product Marketing 100%100% 5. Housing and real estate 100% 6. Power 100% 7. Drugs and Pharmaceuticals 100% 8. Roads and highway, port and harbor construction and maintenance 100% 9. Hotel and tourism 100% 10. MiningFor diamonds and precious stonesFor gold, silver and other non-precious stones 74%100% 11. Advertising/Films 100% 12. Aviation 49% 13. Broadcast Sector 74%

14. RetailMulti

http://www.zanran.com/q/FDI_inflow_Percentage_of_the_World_FDI_source_UNCT AD Potential Sectors: Telecom Sector:

The telecom industry is one of the fastest growing industries in India. Indian telecom industry has the highest growth rate in the world. Indian telecom market has still a huge untapped potential to
grow further. With a large population, India is yet to have complete access to telecommunications across the length and breadth of India. With overall tele-density in India still being 66.17% and rural tele-density at 31.22%, there is significant growth opportunity for the sector, especially in rural areas, especially with 3G and BWA yet to make significant inroads.

Automobile Industry The increase in the demand for cars and other vehicles is powered by the increase in the levels of disposable income in India. The options have increased with quality products from foreign car manufacturers. The introduction of tailor made finance schemes, easy repayment schemes has also helped the growth of the automobile sector. Pharmaceutical Industry: The varied functions such as contract research and manufacturing, clinical research, research and development pertaining to vaccines are the strengths of the Pharma Industry in India. Multinational pharmaceutical corporations outsource these activities and help the growth of the sector. Still there is a potential for growth in FDI in this sector Cement Industry The FDI inflow in the Cement Industry in India has increased with some of the Indian cement giants merging with major cement manufacturers in the world such Holcim, Heidelberg, Italcementi, Lafarge, etc. Semiconductor Industry The FDI in Semiconductor sector in India were crucial for the development of the IT and the ITES sector in India. With more FDI, semiconductor manufacturing facilities can be built in India to compete with other Asian countries like Phillippines.