FDI Policy Liberalised: Retail, Aviation, Broadcasting & Power Exchanges
Current · Source: Reserve Bank of India · RBI/2012-13/217 · issued 21 Sep 2012 · ~2 min read
Quick answerRBI has liberalised FDI norms across five sectors: single-brand retail (100%), multi-brand retail (51%), civil aviation (49% for foreign airlines, under automatic or government route), broadcasting carriage services (limits reviewed, under automatic or government route), and power exchanges (49% under government route). Investments in single-brand retail, multi-brand retail, and power exchanges require government approval; civil aviation and broadcasting carriage services may be under automatic or government route.
The rule, in the simplest words
Foreign companies can now invest up to 100% in single-brand retail, but only one non-resident entity is allowed and it needs government approval
Foreign companies can invest up to 51% in multi-brand retail, but this also needs government approval
Foreign airlines can invest up to 49% in Indian aviation companies, and this can be done through either the automatic or government route
Foreign companies can invest up to 49% in power exchanges, but this needs government approval
How it plays out — a real example
A foreign investment officer at a bank in Mumbai is working with a client who wants to invest in a single-brand retail company in India. The officer explains that the client can invest up to 100% in the company, but they will need to get approval from the government first. The officer helps the client to prepare the necessary paperwork and submit it to the government for approval.
What changed
FDI up to 100% is now permitted in single-brand product retail trading by only one non-resident entity under the government route. FDI up to 51% is now allowed in multi-brand retail trading under the government route. Foreign airlines can now invest up to 49% in Indian civil aviation companies under automatic/government route. FDI limits for broadcasting carriage services have been reviewed. FDI up to 49% is now permitted in power exchanges under the government route.
What it means for you
Banks must update their internal FDI compliance checklists to reflect these new sectoral caps and the mandatory government approval route. AD Category-I banks need to guide clients seeking foreign investment in these sectors on the revised limits and the requirement to follow conditions stipulated in the respective DIPP press notes. The circular also signals that further amendments to FEMA regulations will follow, so banks should watch for those notifications.
What you must do
Update internal FDI processing guidelines to reflect the new caps for single-brand retail (100%), multi-brand retail (51%), civil aviation (49% for foreign airlines), and power exchanges (49%).
Advise clients that all investments in these sectors require prior government approval as per the respective DIPP press notes.
Monitor RBI's website for the forthcoming amendments to FEMA 20/2000-RB to align operational procedures.
Ensure your staff can distinguish between automatic and government route requirements for civil aviation and broadcasting carriage services.
Who it affects
AD Category-I banks, Non-resident investors in retail, aviation, broadcasting, and power exchange sectors, Indian companies in single-brand retail, multi-brand retail, civil aviation, broadcasting carriage services, and power exchanges
❓ Common questions
Do these FDI changes apply to all types of retail trading?
No. The circular specifically covers single-brand product retail trading (100% FDI) and multi-brand retail trading (51% FDI). Both require government route approval and compliance with conditions in the respective DIPP press notes.
Is government approval mandatory for foreign airlines investing in Indian civil aviation?
Yes, but the route can be automatic or government, depending on the terms in Press Note No. 6 (2012 Series). Banks should verify the specific conditions before processing such investments.
What should banks do if a client wants to invest in a power exchange?
Banks must ensure the investment is up to 49% FDI, follows the government route, and complies with conditions in Press Note No. 8 (2012 Series) and the CERC Power Market Regulations, 2010.
📜 Read the original circular — full text as issued by RBI
RBI/2012-13/217
A. P. (DIR Series) Circular No. 32
September 21, 2012
To
All Category-I Authorised Dealer Banks
Madam / Sir,
Foreign investment in Single–Brand Product Retail Trading/ Multi-Brand Retail Trading / Civil Aviation Sector / Broadcasting Sector / Power Exchanges - Amendment to the Foreign Direct Investment Scheme
Attention of Authorised Dealers Category – I (AD Category - I) banks is invited to the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000, notified vide Notification No. FEMA 20/2000-RB dated May 3, 2000 , as amended from time to time.
2. The extant Foreign Direct Investment policy has since been reviewed and it has now been decided as follows:
a) FDI up to 100 per cent is now permitted in Single–Brand Product Retail Trading by only one non-resident entity, whether owner of the brand or otherwise, under the Government route subject to the terms and conditions as stipulated in Press Note No. 4 (2012 Series) dated September 20, 2012 issued by the Department of Industrial Policy & Promotion, Ministry of Commerce & Industry, Government of India.
b) FDI up to 51 per cent is now permitted in Multi-Brand Retail Trading under the Government route, subject to the terms and conditions as stipulated in Press Note No. 5 (2012 Series) dated September 20, 2012 issued by the Department of Industrial Policy & Promotion, Ministry of Commerce & Industry, Government of India.
c) Foreign airlines are permitted FDI up to 49% in the capital of Indian companies in Civil Aviation Sector, operating scheduled and non-scheduled air transport, under the automatic/Government route subject to the terms and conditions as stipulated in Press Note No. 6 (2012 Series) dated September 20, 2012 issued by the Department of Industrial Policy & Promotion, Ministry of Commerce & Industry, Government of India.
d) FDI limits in companies engaged in providing Broadcasting Carriage Services under the automatic/Government route have been reviewed and the same would be subject to the terms and conditions as stipulated in Press Note No. 7 (2012 Series) dated September 20, 2012 issued by the Department of Industrial Policy & Promotion, Ministry of Commerce & Industry, Government of India.
e) FDI up to 49% is permitted in Power Exchanges registered under the Central Electricity Regulatory Commission (Power Market) Regulations, 2010, under the Government route, subject to the terms and conditions as stipulated in Press Note No. 8 (2012 Series) dated September 20, 2012 issued by the Department of Industrial Policy & Promotion, Ministry of Commerce & Industry, Government of India.
3. A copy each of Press Note Nos. 4,5,6,7 and 8 (2012 Series) dated September 20, 2012 issued in this regard is enclosed.
4. AD Category - I banks may bring the contents of the circular to the notice of their customers/constituents concerned.
5. Necessary amendments to Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 (Notification No. FEMA 20/2000-RB dated May 3, 2000) are being notified separately.
6. The directions contained in this circular have been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.
Yours faithfully,
(Rudra Narayan Kar)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2012-13/217 · issued 21 Sep 2012. The plain-English explanation above is BankPulse’s own independent summary.
Example: if you are a Compliance officer at a bank this circular applies to (AD Category-I banks, Non-resident investors in retail, aviation, broadcasting, and power exchange sectors, Indian companies in single-brand retail, multi-brand retail, civil aviation, broadcasting carriage services, and power exchanges), your first concrete step on “FDI Policy Liberalised: Retail, Aviation, Broadcasting & Power Exchanges” is: “Update internal FDI processing guidelines to reflect the new caps for single-brand retail (100%), multi-brand retail (51%), civil aviation (49% for foreign airlines), and power exchanges (49%).” (RBI issued this 21 Sep 2012).
Action required: Update internal FDI processing guidelines to reflect the new caps for single-brand retail (100%), multi-brand retail (51%), civil aviation (49% for foreign airlines), and power exchanges (49%).
Action required: Advise clients that all investments in these sectors require prior government approval as per the respective DIPP press notes.
Action required: Monitor RBI's website for the forthcoming amendments to FEMA 20/2000-RB to align operational procedures.
Action required: Ensure your staff can distinguish between automatic and government route requirements for civil aviation and broadcasting carriage services.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=7579&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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