India's gift to coal mining, contact manufacturing, digital media and single brand retail trading
The Cabinet Ministry has announced series of reforms through press release dated 28 th
August 2019 1 , towards development of commerce and industry in India and as cabinet
minister Piyush Goyal said, with an aim to “liberalise and simply the FDI policy to provide
ease of doing business in the country, leading to larger FDI inflows and thereby
contributing to the growth of investment, income and employment”.
The press release introduces reforms in four major sectors, i.e. coal mining, contract
manufacturing, digital media and single brand retail trading.
1. Coal Mining: 100% FDI under automatic route has been permitted for sale of
coal, coal mining, setting up coal processing plants such as washeries and
associated processing infrastructure such as coal washery, crushing, coal handling
2. Contract Manufacturing: At present, there is no specific provision for contract
manufacturing in the FDI policy, either under manufacturing or otherwise, thus,
the press release clarifies that 100% FDI under automatic route in contract
manufacturing is allowed. A ‘contract manufacturer’ is a person who
manufactures goods/products on contractual basis. This process of accepting
contracts and manufacturing and delivering the requested goods/products is
known as contract manufacturing.
3. Digital Media: in addition to already existing 49% FDI under approval route in up-
linking of news & current affairs tv channels, permission has been granted for
26% FDI under government route for uploading/streaming of news & current
affairs through digital media on the lines of print media.
4. Single Brand Retail Trading (SBRT): Presently, SBRT entities are required to set
up brick and mortar stores before they could initiate selling their products online.
Now, the press release permits retail trading through online trading prior to
opening of brick and mortar stores, subject to the condition that the entity opens
brick and mortar store(s) within 2 years from date of start of online retails.
Further, the local sourcing requirement has been revamped in order to facilitate
greater flexibility and ease of operations.